How to get a debt consolidation loan with bad credit history



There are ways to consolidate your debt regardless of your credit rating. (iStock)

Debt Consolidation Loans are one of the ways in which consumers with multiple debts can start paying off their balances. In these loans, all debts are consolidated into one account, which allows borrowers to make only one monthly payment until the balance is paid.

This simplifies the budgeting and repayment process and, in many cases, can even completely reduce the cost of borrowing money.

But debt consolidation loans often require high credit ratings… For consumers who don’t fall into this category, read on.

How to get a debt consolidation loan with bad credit history

According to Howard Dvorkin, commercial director and chairman of, consumers generally want FICO score at least 700 to qualify for an affordable debt consolidation loan. However, borrowers with grades below this threshold have no choice.

“For those looking to get a consolidation loan with bad credit, the lender can help them consolidate without any problems,” Dworkin said. “However, consumers with bad credit should be especially careful when buying loans because predatory lenders usually lend to borrowers with bad credit.”

Finding lenders is critical for all borrowers, especially those with low credit ratings. Use online marketplace like Credible to make sure you get the best rate and lender for your needs.


How to improve your credit score

Fortunately, credit ratings always change, so consumers with low credit ratings can improve before applying for a loan.

This can be done in several ways, including:

  1. Decrease in debt and credit card balances
  2. Paying bills on time, every time
  3. Correcting mistakes in your credit report
  4. Request for an increase in the line of credit
  5. Adding a person with a high credit score as an authorized user to your account
  6. Avoid new loans and credit cards
  7. Keeping open accounts for a long period of time (even with redemption)

With a debt consolidation loan, you can potentially save on interest, which will lower the total amount you end up paying and help you pay off the debt faster. To get an idea of ​​what personalized loan options are available to you, visit Credible to compare rates and lenders

Amid the COVID-19 pandemic, three major credit bureaus offer free weekly credit reports all Americans (until April 2021). Consumers looking to improve their results should use these reports to track their progress.

Other options

Debt consolidation loans are not the only option for consumers dealing with large amounts of debt. Balance transfer cards can also be a strategy to consider.

Balance transfer cards allow borrowers to transfer their debts to a single credit card – often with a low or zero interest incentive period. If the borrower is able to pay them back within this time frame, it could mean significant savings in the long run.

If you want to pay the debt off Fast, a credit card with balance transfer might be just what you need. Consider using an online marketplace like Credible to compare next to the transfer card with the maximum balance and choose the right one for you.


Types of debt to consolidate with a personal loan

Many consumers use individual debt consolidation loans to solve credit card balancesbut, according to Dvorkin, these are not the only options for debt consolidation.

“Most people think that debt consolidation loans can only pay off credit card debt, but consumers can consolidate debts through unpaid medical bills, collection bills and payday loans,” Dworkin said. “There is also consolidation for certain types of loans such as federal student loans, private student loans and auto loans.”

If you want to get an idea of ​​what debt consolidation loan options are available to you, visit Credible to compare rates and lenders


Pros and cons of debt consolidation with a personal loan

Debt consolidation may have some significant advantages


  • This makes paying out easier: This means that only one payment comes in per month, making budgeting and money management easier.
  • Lower payments and lower interest rate: For those with a good credit rating, this can be another benefit. “If someone has trouble paying minimum credit card statements and has up to $ 25,000 in credit card debt and a decent credit rating, a consolidated loan can lower their monthly payments, lower their interest rate, and help them get out faster. out of debt, ”Dworkin said. “Debt consolidation is better than debt settlement and can help maintain a good credit rating if done right.”

To take advantage of these benefits, go to Credible to apply for a debt consolidation loan Today.


On the other hand, debt consolidation loans can also be risky, especially for those with bad credit habits.

  • Potentially exacerbating your financial difficulties: Failure to make a payment on the loan, or worse, use the loan for other purchases (and not just to pay off those debts), can lead to even greater financial problems.


The essence

Low debt is not insurmountable. With debt consolidation loans and balance transfer cards, there are ways out – even with bad credit.

For consumers who choose a consolidated loan, finding information (Trustworthy can help), as when using detailed loan calculator to ensure that these payments are affordable. It is also wise to speak with an experienced loan officer or financial advisor.



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