If you have bad credit, you can wonder how you will ever get the money you need to get out of debt and restore your credit rating. As strange as it may seem, the answer to your problems may be another loan; Taking out a debt consolidation loan can help you repay some or all of your outstanding debt and leave you with just one payment to make each month instead of more.
Getting a debt consolidation loan while having bad credit may seem impossible, but there are several ways in which you can improve your chances of finding and receiving the loan that you need despite your less than perfect credit rating.
Here are some tips on how to improve your chances of getting the loan you need, as well as some tips on where to look for lenders who will lend you money even if your credit is poor.
Pay off your debt
The first thing you can do to increase your chances of getting the loan that you need is to spend some time trying to pay off your debts and get most of them a little more current. Even if you can’t afford the smallest payments, try sending what you can afford as many of your debtors as you can.
If you can make two or three payments that are more or less timely for some or all of your debtors, it can help you turn your case to a potential lender by showing that you are trying to repay your debt but need some help getting the money.
Paying down your debt in this way will also lower the total amount you owe and thus reduce the amount you will have to borrow… which can also help a lender make a decision.
Another way you might be able to improve yourself in the face of potential lenders is by reducing the number of outstanding debts that you have. Instead of paying smaller amounts to multiple debtors, you may decide to try to pay a select pair of debt to stop these debtors from continuing to make negative reports against your credit.
This can have a significant impact on how you look to potential lenders, although this method may cause some of your other debts to continue to grow because you only make payments on certain receivables.
If you are unable to borrow the money you need to consolidate all of your debt, you can think of borrowing only enough to consolidate your biggest debt. This will be able to pay off the debts you want the most trouble with and replace them with a single payment, and it will reduce the amount you want to borrow enough that you shouldn’t have a hard time finding a lender who are willing to offer you the consolidation loan.
Finding the right loans
The key to finding the right loans for your debt consolidation is to keep your options open. Request loan offers from various lenders, including finance companies and online lenders, using a high value item or freight value as collateral to secure the loan. You will probably pay a higher interest rate than if you had better credit, but by taking the time to compare loan offers you should be able to find the best interest rate you can get.