The best debt consolidation loans would likely come from a traditional bank or a credit union. These places tend to offer the lowest interest rates, and most favorable terms and conditions. But if you can’t get approved by these places, there are other options out there.
Many borrowers with low credit scores have a difficult time getting approved for loans from banks or credit unions. It may even be difficult to get approved for a credit card if your credit score is lower-than-average. So where do borrowers with subprime credit scores go to consolidate their debt?
One popular option, in this case, would be a personal installment loan. This is an unsecured loan, meaning you can get one without collateral. They’re issued based on the borrower’s promise to repay. These loans tend to be larger than payday loans, and you have a longer repayment period as well. Making them good candidates for consolidation if you can’t get approved elsewhere.
Personal installment loans may offer you several thousand dollars depending on your credit history, bank account status, and income. While many traditional lenders focus mainly on your credit score and credit history, personal installment lenders focus more on your ability to repay the loan. Which in some cases allows borrowers with poor credit scores to still be approved.
If you’re looking to consolidate your debt, the process is fairly straightforward. Whether you use a personal installment loan, a credit union loan, or a loan from a friend or family member, the steps will be the same:
- First, you take out one large loan
- Next, you use that loan to pay off all of your smaller debts
- Then you focus all of your payments on that one large loan
- You pay off the loan and your debts are completely paid off
Consolidation can be a great option for borrowers who are struggling with several monthly loans or credit card payments. Simplifying your monthly payments is the first step in getting them all paid off. Not only does it make your monthly payments more manageable, but you might also save money if your new loan has a better interest rate than most of your other smaller loans.
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