If you are a homeowner or renter who is struggling to pay off that bad credit personal loan, you are not alone. Lenders are often willing to offer bad credit personal loans to men and women who need a little help. The problem is that making the payments might become a bigger challenge than expected. Fortunately, we offer help in consolidating that loan so that it is easier to manage.
The Bad Credit Problem:
We understand that bad credit happens for a wide range of reasons. It can happen as a result of losing a job, taking a pay cut or even a financial emergency that resulted in paying the bills and debts late for a few months. Regardless of the initial cause, when the credit score drops below a certain level it has some potential problems that arise.
The major problem when it comes to taking out a personal loan is the high interest rate. Lenders are willing to offer a bad credit personal loan without any security because they can charge a higher rate for the supposed risk. Even those who have shown previous responsibility and have a problem with credit due to unforeseeable events will find that the interest charges become difficult to manage.
The result of higher than expected interest rates is the higher monthly payment that is difficult to manage. When you’ve ended up in this situation, finding a solution should become the top priority.
Consolidating for Easier Payments:
Opting for a bad credit personal loan consolidation service is perhaps the best solution to the high interest loan situation. The consolidation is designed to help bring down those interest charges so that the monthly payments are no longer a severe problem.
The basic method of any consolidation service is working out a way to reduce the total interest. For example, someone who has taken out an unsecured bad credit personal loan might obtain the funds at a rate of 25 percent interest. When the consolidation service works out a plan to reduce the interest, it might result in bringing down the amount to a reasonable 15 percent interest, which dramatically reduces the payments.
Monthly payments on a personal loan are calculated and broken down over the term of the loan. The proceeds of the monthly payment are primarily interest charges, and then a small portion of the amount goes into the debt. Consolidation helps reduce the amount of funds going into the interest and thus helps lower the total monthly payments as well.
How Consolidation Works:
Consolidation services are designed to help reduce the monthly payments. Our services work through negotiation with the creditor so that you receive a lower payoff amount.
The way we work is by first assessing your financial situation. We look over the information relating to necessary expenses, the bad credit personal loan and the income figures. We are then able to determine the goal of the bad credit personal loan consolidation that will make the situation a little easier for you and your family.
After understanding your personal needs, we then contact the creditor who has issued the bad credit loan. We explain the situation to them and then ask for a reduced payoff balance. Since we have a goal in mind that will make your finances a little easier to manage, we strive to bring down the principal as much as possible.
In most cases, the negotiation will take a few days as the creditor and our professional negotiators work out a payoff that meets your needs and keeps the creditor happy with the situation.
The Credit Benefit:
The bad credit score is part of the financial problem because that personal loan is able to charge higher due to the supposed risk. While it might seem difficult, after we negotiate a plan with the creditor to consolidate the debt, you will see some changes to your credit.
The changes of working with a consolidation service are positive. When the new plan is in place, you will have less money going into fees and charges so that more money is available to ensure all of your debts, expenses and bills are paid on time. This will result in a better credit rating that continues to improve over time.
Consolidation does not have the negative impact on credit ratings that bankruptcy or other similar extreme measures cause. As a result, the rating and history information will improve.
Opting for bad credit personal loan consolidation services can help your finances. You are not alone and we understand how to solve the financial problems. Give us a call or fill out the form for a free debt analysis and to learn more about the services that might help you.