Debt consolidation loans for people with bad credit have received a lot of media exposure lately. Nevertheless, not all institutions are able to provide a good enough offer to ensure that individuals with a credit score lower than 660 can actually receive a good enough benefit from switching to debt consolidation.
In the following, we’ll take a look at some of the financial institutions that have the most well-known consolidation programs, not all of which, however, are practical for people with bad credit.
Banks and Credit Unions
The first place most people go to when looking for debt consolidation loans for people with bad credit are banks and credit unions. However, even though you might think that an institution you know and trust will help you take care of your problem, this is usually not the case.
Basically, the worse your credit is, the smaller your chances to be eligible for a consolidation loan. Even if you do get approved, you may need to pay much more on interest than someone with a better credit score (http://www.toptenreviews.com/money/debt/best-debt-consolidation-companies/).
A somewhat less popular but quite effective option is to get a payday loan to pay off debts that you need to consolidate as quickly as possible. For people with bad credit, this option can be a very good one as long as they are able to pay off the loan on time.
Payday loans are generally small amounts that you’d have to pay off in 1-6 months, depending on the policy of the loan. However, aside from the fact that the interest required is usually much higher than the that of most average debt consolidation loans for people with bad credit, the penalties for being late on your payment can be extremely harsh.
Debt Consolidation Lenders and Debt Relief Companies
Probably the best option for people with bad credit constitutes a debt consolidation firm that can help them make the best possible choice depending on their income, credit score, ability to meet their repayments and various other variables.
The process is simple:
1. You call a debt consolidation company to ask for advice.
2. You provide them with a general outline of what your financial situation may entail.
3. They provide you with various loan offers, and discuss them with you to help you decide which one might be best.
4. By comparing different bad credit loans and interest rates provided by different companies, you can decide on the best one.
When it comes to debt consolidation for people with bad credit, this process can often help reduce overall debts by more than 30%, and the convenience, support and flexibility you get are all well worth the effort you may put into researching the best company.