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Dealing with debts is not only financially challenging but emotionally taxing as well. Financial obligations like these can, after all, cripple your personal life. If you are having a hard time getting your multiple bills managed properly and paid off on time, it may be best for you to consider taking out a loan to consolidate them.
Debt Consolidation Loans
These are loans taken out with the intent to pay off any existing debts that the borrower has. This effectively combines the entire debt total into one single loan that the borrower then pays off monthly through one single payment. The goal is to get the number of debts reduced significantly while also reducing the interest rates involved. Ultimately, this helps the borrower manage his financial obligations better since he will now only be responsible for one single debt.
Advantages of Debt Consolidation
If you’re planning on taking out an unsecured loan to consolidate your debts, you get the upside of not being required to put up assets or properties to get the loan approved. This means that there would be no risk of you losing your property if you are unable to pay the loan back.
For secured loan consolidations, you can take advantage of lower interest rates since the borrowing is banked on the property you are presenting as collateral. You’re likely to borrow a much larger amount too since lenders will generally see you as less risky, which could also lead to better repayment terms.
Disadvantages of Debt Consolidation
For unsecured debt consolidation loans, qualifying can be quite hard especially if your credit score isn’t top-notch. If you do get approved, you can expect that the borrowing rates will be high. In addition, if you are to apply for a secured debt consolidation loan, you stand to lose your property if you are unable to get the loan paid off.
Consolidation Loans for People with Bad Credit Score
For borrowers with unsatisfactory credit ratings, finding loan alternatives in times of urgent financial crises can prove to be a challenge. Because of the rise in the volume of borrowers' unpaid debts, lending firms and banking institutions have decided to fix a credit scoring system designed to ferret out borrowers that are likely to be insolvent. With such credit scoring system in place, borrowers with existing financial liabilities who fail to make their payments regularly have records that reveal their poor payment history, while borrowers with earning capacities that fall short of what is required by the lending industry were consequently assigned weak credit scores. As a result, borrowers with bad credit history and poor credit scores were automatically denied the opportunity to secure conventional loans from legitimate lending institutions. But with the innovative and more flexible new loan services that have recently been made available in the lending market, borrowers with poor credit may now choose from a variety of affordable loan services. For borrowers with multiple debts, consolidation loans for poor credit may be the best alternative. Through this loan solution, borrowers with existing multiple loans may simply combine all their existing debts into one credit. Instead of having to keep up with multiple payments on a regular basis, with consolidation loans, borrowers only have to worry about one payment term. Under this type of loan solution, borrowers basically secure a loan to cover all their other existing loans, with the aim of extinguishing all existing debts with just one credit. This loan option is especially beneficial to borrowers in poor credit situations, as this allows borrowers the opportunity to wipe clean their credit history. In applying for consolidation loans, borrowers need only go online and submit their application forms and requirements from anywhere, and at their most convenient time.
Things to Get a Cconsolidation Loan Successfully
If you have a bad credit score and you want to fix that? A debt consolidation loan might be able to help.
But finding a debt consolidation loan while having a bad credit is hard. Usually a good or fair credit is required when you borrow money to consolidate a debt. Although there are debt consolidation loans for people who have bad credit, but the rates and terms are not so great.
One thing you could do to help your situation is never choosing a loan out of desperation. It might end up being more expensive in the long run.
Here are a few tips on choosing a good consolidation loan.
Compare Debt Consolidation Loans
Use a service that will compare lenders who offer debt consolidation loans to people who have bad credit scores. This also allows you to compare the terms.
While having a bad credit score, it’s to be expected that you’ll be given higher rates, so be prepared for that. APRs on this kind of loans can reach as high as 36% in some cases. And the payment terms can span from 24 to 60 months.
Use Peer-to-Peer Lenders
Peer-to-peer lending uses funds from other investors to allow you to borrow money. These investors will then review your application and decide if they want to lend you. There may be multiple investors that will review your profile. And although multiple investors will fund your loan, you’ll still only be paying a single payment per month.
Transfer Balance to a Credit Card
Qualifying for a zero % balance transfer card can be pretty hard if you have a bad credit. You can however use your existing card to transfer the balance if you have enough available credit.
Even without having the lower interest rate, the fact that you can consolidate your bills are a good thing, that way you can focus on only one payment.
Choosing The Right Loan
If you are having financial problems, considering a loan might be a good option. However, you need to carefully choose which loan you need before applying for it. Unsecured loans such as payday loans, credit cards, short-term, and other similar types can be great during emergencies. However, keep in mind that unsecured loans may have higher interest rates compared to secured business loans. It is highly recommended for emergency situations but should not be considered for long-term goals.
Ready To Get Started?
Select Your Loan Choose the loan that is suitable for your needs. We have plenty of loan options you can choose. Whether you’re planning to buy a new car or need a short cash to keep your day rolling. we have everything prepared for you.
Provide Your Information After you have selected a loan, visit the lender’s site and complete an online form. You need to provide your details for us to process your application. You will receive a notification once everything is already completed.
Get Your Funds Results are posted in just a few minutes. Once you are approved, the amount that you have requested will be deposited immediately and directly to your checking account. Automatically, the money will be posted and you can use it to pay for online or offline transactions.
Frequently Asked Questions
Got questions? We have answers!
How Fast Can I Get The Money?
You can have the funds in as fast as 15 minutes. All you have to do is to complete an online form and provide your information. Processing your application would take a few minutes or less. Once approved, the funds that you have requested will be deposited instantly to your account.
Do I Need A Guarantor?
If your credit is good, most lenders would be okay with you not providing a guarantor. Unsecured loans are extra risky for lenders due to the absence of collateral. With no other backing aside from the borrower’s creditworthiness, it would be reasonable for lenders to demand extra security. If you currently don’t have a credit history, it would be best to go for a guarantor loan.
What If I Miss My Payment?
There are times that this could happen. We understand that there are circumstances that prevents you from paying on time. If you are having difficulties paying off your loans, you can reach out to your lender to provide you with convenient options. Delayed or missed payments could set you back and cost you additional fees and charges.
What Happens If I Lie On My Application?
Even if you’re tempted to, don’t lie on your application. Once a lie is caught, the lender may void all your application and incur additional fees and penalties. Worse, if you have falsified your documents, you might end up locked in a cell for a very long time.
What Is A Payday Loan?
Payday loans are types of unsecured loans that are easily obtained. If you’re in need of immediate cash assistance, payday loans are your best friend. You can have the funds immediately on the same day of application. Repayment terms are also flexible. You can either have it tied on your next paycheck or pay it in advance.