Got Bad Credit? Here’s How to Consolidate Your Debts with Bad Credit

How to consolidate your debt with bad credit? Some would say “easy!” as the process is basically the same as for your regular debts.

Debt Consolidation allows you to refinance your home loan with bad credit so you can keep track of your payments easier and reduce general costs. This can be obtained by making only one payment per month, instead of multiple different payments. Each payment usually comes with its own interest rate and fees that only add up to how much you have to pay each month.

Stop wondering about “how to consolidate your debt” and check out the benefits and options you’ll have when you obtain debt consolidation!

Why consolidate debts?

  1. Secure a lower interest rate
  2. Likely to have an improved credit rating in the future if you consolidate your debt. Putting together all your debts, you’ll avoid multiple defaults as you will have to deal with only one payment.
  3. The repayments will be lower and you will receive a better rate.
  4. Your stress levels will lower due to not having to worry about an avalanche of payments that keep piling up.
  5. If you have a bad credit history, debt consolidation will raise your score and make you more likely to have a loan approved.

What kind of debts can I consolidate?

  • Credit cards or store cards
  • Bills, rates or tax debt
  • Personal loans or car loans

How can I consolidate if I have bad credit?

Even if you have a bad credit, there are lenders willing to take the chance and borrow you the necessary amount of money to combine your small loan into a single, larger one. Although there aren’t many options, you still have the possibility to consolidate your debts.

An unsecured personal loan

Set up an appointment with a lender and find out how an unsecured loan can help your situation. Careful to make soft enquiries online first which do not affect your credit score further. And yes, interest rates will be higher than normal, but with a good deal, you’ll start saving money and start paying your debts faster.

A secured equity loan

Set up an appointment with a Non Conforming Lender and find out how a secured loan can help your situation. They will work out what equity is available to consolidate your debts and look to negotiate down the payout figures with your creditors.

A debt agreement

Similar to a form of bankruptcy, a Part 9 Debt Agreement will prove that you aren’t able to pay your debts at their current rates anymore. Even though it will go in your credit file history and could pose some problems in the future, it might be the best solution for restoring the balance of your finances.

Final thoughts on Consolidating Debt with Bad Credit

If you’re thinking about consolidating your debt, you should first establish the nature of your loans and decide what is best for your situation. You need to be aware that the loan terms, fees, and interest rates vary according to each lender’s conditions. Keep in mind that not all debt consolidation processes allow you to combine all your loans.

So, the best thing to do is to look for various lenders, compare them and choose the best one for your financial needs.