Debt consolidation loans offer a way for you to get out from under a
heap of debt in the easiest way possible. These loans are taken out
specifically to pay off other loans, and shift all of your debt into one
account. This can make it easier to deal with your debt in a number of
ways.
- you'll only be dealing with one creditor instead of many
- you'll generally get a lower interest rate on one loan than the combined interest rate you're paying on all of your credit accounts
- you'll find it far easier to pay just one bill per month rather than multiple accounts
More often than not, if you're considering debt consolidation
loans, your credit has already received a few knocks. Perhaps you've
missed a payment or made a payment late. Your credit score may not be
quite what it should be because you've extended your credit to the
limit. In any case, you may be finding it difficult to secure
consolidation loans because of your current credit situation. It's a
difficult situation - you could get a handle on your debt if you could
get one of the specialist loans for which you've applied, but the amount
of debt you're carrying rules out most of the traditional loans
available.
The answer could lie in one of the many lenders who offer bad
credit debt consolidation loans. These are lenders who are willing to
work with people who have less than perfect credit. Because they are
willing to take on the higher perceived risk of lending money to someone
who already is carrying a lot of debt, you can expect that they'll only
offer loans to those who can reasonably guarantee repayment. In most
cases, they do this by offering homeowner loans or secured loans – loans
where you put your house up as collateral. In addition, they'll usually
charge a higher rate of interest than lenders who deal with "safer"
borrowers.
If you're looking for bad credit debt consolidation loans, there
are a few guidelines that can help you find the cheapest and make the
most of what you can borrow.
- Be sure that a debt consolidation loan will cost you less than paying off your accounts over time.
These loans only make sense for one of three reasons: - A single loan will cost you less overall than paying off all of the loans over time. Don't forget to factor in any prepayment or loan transfer fees.
- By taking out a debt consolidation loan, you'll pay off your debt sooner. Getting out of debt more quickly is a powerful reason for using these.
- Using a loan like this will lower your monthly obligation. This may be the most important consideration if you're having trouble meeting your monthly bills. Sometimes it's worth paying more overall to be able to pay in smaller installments.
- Shop around for the cheapest options available.
Check online and compare lenders who offer bad credit debt consolidation loans and compare offers. You'll find everything you need to make an informed decision about lenders and the loans they offer quickly and easily.
Rachael Gallant has worked for the UK financial services market
for a number of years specialising in secured loan applications for UK
home owners. She understands how time consuming it can be trying to
interpret the associated jargon which is why she writes clear, easy to
understand guides exclusively for "Secured Loans Centre".
