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15 Feb 2019

Consolidating your Loans with Personal Loans for Bad Credit

Personal loans for bad credit are probably the easiest way to consolidate your loans without having to stretch your borrowing limits. Here is a breakdown of how this is so.

Debts can be quite frustrating especially when they get to a point where you are only able to pay the interest. This might leave you wondering how you will ever be able to pay the entire debt or you are just going to service the loans for the rest of your life. The fact that you are only able to pay the accrued interest means that all your projects and life aspirations are at a standstill. There is however a solution to your problem. With personal loans for bad credit, you can be able to consolidate your debts into one. This way you will be able to get a lower interest loan, allowing you to pay the interest together with a share of the loan.

What is a debt consolidation loan?

A debt consolidation loan is a loan for people with or without bad credit, that pays off debts from multiple lenders from whom they have borrowed. This could include, credit cards, students’ loans, and many more sources. Different loans attract different interest rates and with multiple lenders breathing down your neck, it might be impossible to meet every monthly payment without forgetting or without having limited finances to cater to all these lenders. With debt consolidation, you get to pay back the loan in one single monthly payment which has a fixed rate of a period between 24 and 60 months. Other than having to pay one single loan, debt consolidation offers lower interest rates which make the process of obtaining financial freedom quick and easy.

Debt consolidation with personal loans for bad credit.

As already mentioned, with bad credit, you can always get a personal loan since there are lenders who provide these loans without conducting any credit check. Bad credit is considered to be one between 691 and 300. With a bad credit score it is almost impossible to get a loan from the bank therefore, below are some of the viable lenders for people with bad credit.

  • Credit unions – Credit unions are one of the most reliable sources of financing. Their transactions are usually transparent therefore no hidden charges. If you have been a member of a credit union for a long time, it is possible that they will offer you loans with very low interest rates (in most cases the maximum allowable rate is 18%). This is unlike banks where a bad credit score is a red flag to them. Banks might offer the loan but with very high-interest rates, therefore, defeating the purpose of loan consolidation. The interest rate of a loan offered by the bank might go to as high as 30%.
  • Family and friends- getting a personal loan from family and friends could be a viable source. This is because you can get the loan at a relatively low-interest rate. Family and friends can offer additional favorable terms like an extended period of payment.
  • Getting a co-signer- A co-signer is someone whose credit score is impressive. Co-signing, therefore, will assure lenders of your capabilities of payback the loan therefore, it might not be as hard as trying to get the loan with your bad credit score. It is also possible to get a lower interest rate loan since you are relying on the co-signer’s credit score.
  • Online Lenders. The internet is flooded with so many lenders who are always ready to help. Most lenders will offer flexible terms of payment. Online lenders will only need to know if you have a steady source of income. If you do, then you qualify for a personal loan that will help you consolidate all the other debts you have. When getting a loan from these lenders however, you will need to check all charges. Some have hidden charges which make the loan all more expensive.

Advantages of debt consolidation

  • With debt consolidation, you will be able to trade off high-interest debts for a lower interest loan.
  • The process of application is quick and easy as compared to other loans.
  • When you fall behind on personal loan payment, you can be discharged on bankruptcy grounds.

Debt consolidation with personal loans for bad credit could be your best option yet when it comes to financial freedom. If you are looking to consolidate your loan or in need of financial advice, contact us today and we will help you navigate your financial turmoil.