While it may be more difficult, it is still possible to get a debt consolidation loan with poor credit and existing loans. The best way to do this is to thoroughly research different lenders that cater to borrowers with low credit scores. You can find them online, and at certain storefront locations. Your options may be more limited with poor credit, but there are still ways to get the money that you need.
The first step is understanding what exactly a consolidation loan is. Basically, the word “consolidate” means to combine a number of things into one. In finance, it means taking out one large loan and using that money to pay off several other, smaller loans. Borrowers choose to consolidate for a variety of reasons. Most notably, it makes managing your monthly finances much easier. Instead of having to worry about several loan payments every month, you’ll only have one.
Another great advantage is that finding a consolidation loan with a lower APR than the average interest rate of your other debts will help you save money. However, there are certain types of loans that would allow you to get a better rate than your other loans. These include traditional bank loans and credit union loans. And if you have a low credit score, these options may not be available to you.
So where do you turn for a consolidation loan if you have a less-than-perfect credit history? Many borrowers use personal installment loans. A personal installment loan is an unsecured personal loan that allows low-credit customers to get larger amounts of money and pay it off over a longer repayment period compared to payday and title loans. This makes them good for consolidating your debts if you can’t get approved for a bank or credit union loan.
No matter which type of loan you choose for consolidating your debts make sure that you’re fully aware of all the terms and conditions. It’s important to be 100% sure that you can afford the monthly payments and that you can repay the entire loan by the due date.
