How to Consolidate Your Debt, Even If You Have Bad Credit
How to consolidate your debt when dealing with bad credit? Some would say “easy!” as the process is basically the same as for your regular debts.
Consolidation allows you to 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!
How to consolidate your debt and what benefits will you gain from doing this
- Choosing to consolidate bad credit loans could secure a lower interest rate.
- It’s also likely that you will 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.
- Another advantage of consolidating your debt is the fact that the payments will be power and you will receive a better rate.
- Your stress levels will lower due to not having to worry about an avalanche of payments that keep piling
- If you have a bad credit history, debt consolidation will raise your score and make you more likely to have a loan approved.
Types of debts that can be consolidated
- Credit cards or store cards
- Bills, rates or tax debt
- Personal loans or car loans
How to consolidate your debt when you have a 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 loan
Set up an appointment with a lender and find out how can an unsecured loan help your situation. Interest rates will be higher than normal, but with a good deal, you’ll start saving money and paying your debts faster.
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.
You’ll talk to a financier that will discuss your situation with all your lenders. This ensures that any loan you’ve taken won’t accumulate any interest anymore.
If you’re thinking about consolidating your debt, you should first establish the nature of your loans. Also, you should be aware that the loan terms, fees, and interest rates vary according to each lender’s conditions. Finally, 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.