Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
This Invisible Tech Stock Threatens Amazon with 800,000+ Online Stores - 21st Nov 19
Crude Oil Price Begins To Move Lower - 21st Nov 19
Cracks Spread in the Precious Metals Bullion Banks’ Price Management System - 21st Nov 19
Why Record-High Stock Prices Mean You Should Buy More - 20th Nov 19
This Invisible Company Powers Almost the Entire Finance Industry - 20th Nov 19
Zig-Zagging Gold Is Not Necessarily Bearish Gold - 20th Nov 19
Legal Status of Cannabis Seeds in the UK - 20th Nov 19
The Next Gold Rush Could Be About To Happen Here - 20th Nov 19
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

How To Secure A Debt Consolidation Loan Even If You Have A Bad Credit Rating

Personal_Finance / Debt & Loans Oct 21, 2019 - 07:18 PM GMT

By: Submissions

Personal_Finance

Debt is constantly on the rise with the latest statistics telling us that almost 80% of people have some form of debt and are making repayments. This includes debt from credit cards, car loans, mortgages, and personal loans which can be for a variety of reasons including sudden car breakdowns or medical emergency bills.


WHAT ARE DEBT CONSOLIDATION LOANS?

At times, there are people who, due to one reason or another, are burdened with more than one type of loan and the situation can be a lot more than one candle. Before taking any drastic steps out of desperation, you should know that there are options you can exercise to help manage the liabilities and reduce the burden on one’s shoulders. One such option is a debt consolidation loan.

While debt consolidation loans do not reduce the overall liability, they do make it easier for one to manage their debt. Under this arrangement, a lender agrees to take on the entire debt you have on your shoulders by extending an amount of money to you that is enough to pay off all your existing loans. Through this, you would only be left with one creditor whom you have to make one monthly payment to. 

IMPROVE YOUR CREDIT SCORE BEFORE YOU APPLY FOR A DEBT CONSOLIDATION LOAN

It’s not difficult to find bad credit lenders but that does not mean one abandons all caution and does not work to getting the best deal possible. Therefore, before you consider applying for a loan, check your credit score and work on improving it. If things are bad enough to warrant the need for a debt consolidation loan, then that means your credit score is going to be quite low. The more loans you have and the worse you are with managing repayments, the more adversely it will affect your credit score.

You need to improve your credit score before you apply for a loan because your credit score will have a direct impact on the interest rate and maximum amount of money your lender is willing to extend. The best person to help you in this exercise is a financial consultant, who will suggest different accounts you can open or financial rearranging you could undertake for your credit score to improve.  

RESEARCH YOUR OPTIONS

Once you have your credit score sorted out, you now need to carry out research on the best deals in the market. By researching different financing options, you can choose a plan that gives you the amount of money you need to pay off all your debt, has an interest rate that still maintains value, and prescribes a repayment plan which you can afford and manage with ease.

Your research will also help you distinguish between genuine lenders and scam artists as there are many people out there just waiting to take advantage of your desperate situation and put you into further problems by offering a high-interest short term loan that will further cripple you financially. Your safest bet would be to speak to your bank or credit union as these are parties that are familiar to you and to whom you are familiar. With a pre-existing dialogue, you can borrow money from a lender you already know without having to worry about any fraudulent activity.

However, chances are high that banks and credit unions would deny your application because of your already existing liabilities with said bank or credit union and the bad credit score you have as a result of having so many loans on your budget in the first place. In such circumstances, you’ll need to turn to private lenders and debt relief companies. You should be prepared for high-interest rates with such lenders as they operate on a risk-based pricing model like banks but without the security of a central regulator that banks have.

FINALIZING THE DEAL

Once you’ve chosen a lender, you’ll start discussing your options and this is where you have your chance to ask all the questions you might have. Leave no stone unturned and try your best to get everything in writing and create a communication chain with your lender. Once your questions are answered and documented, your lender will prepare the paperwork to be signed. Considering that private lenders deal with a variety of clients who have different needs and backgrounds, there won’t be a standard contract in place.

It will also help the discussion move faster if you come prepared with all your information and documentation. Prepare a list of your existing debts with lender details so the lender is aware of everything and doesn’t have to wait for information that could affect the outcome of your application. If you’re asked to fill out a form, be as honest as possible and don’t conceal anything. It’s a lot worse if you hide information rather than disclose it and risk losing the loan as the consequences of concealing information could include fraud or criminal misrepresentation.

You need to read through the paperwork in detail and ensure that your entire discussion is properly and clearly reflected in the agreement. Once you sign the document the deal is done and it will be difficult, if not impossible, to change the contract after it has been signed. So make sure everything is in order before you commit to massive liability.

RECAP AND CONCLUSION

As you can see from the above, debt consolidation loans are a good option if you have a lot of pre-existing debt with several creditors. The ease of management and reduced interaction with various lenders contribute significantly to a person’s ability to repay loans and keep their health in check during the process.

Even if you are able to manage your repayments with so many different lenders, a debt consolidation loan can help improve your credit rating as one loan rather than five different loans is definitely going to have a positive impact on the algorithm that determines your credit score.

By Lyle MacLeod

© 2019 Lyle MacLeod - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules