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HomeBlog Debt ConsolidationConsolidation Loans With Bad Credit Score?
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Consolidation Loans With Bad Credit Score?

July 17, 2012 by Adam Tijerina

There are several ways to handle credit card debt problems when you have bad credit. One of the things that consumers can take comfort in is the fact that many people with credit card debt problems do have bad credit. That is why there are options available for people who have credit score issues. But are there consolidation loans available with a bad or poor credit score?

While there may be many options available, there is only one option that makes sense. People choose debt consolidation loans as their preferred way of handling overwhelming credit card debt. But there are several reasons why you should avoid consolidation loans and go with the better alternative of debt negotiation.

– The Problem Remains Intact

Debt consolidation takes your credit card balances and moves them from several accounts into one account. The step that is missing is the step that addresses the actual balance that you owe.

With a consolidation program, you do not start reducing your debt until you start paying on it. With debt settlement, the first step is negotiating payoff amounts on your credit accounts and lowering your debt to a fraction of what you owe.consolidation loans

– Credit Check Required

A debt consolidation loan is a standard loan that requires a credit check before you can get approved. If your credit is bad, then you may not get approved for a consolidation loan at all, or you would get approved for a loan with a very high interest rate (25 – 35% APR). Neither one of those outcomes works to your benefit.

Anyone can use a debt settlement program as there are no credit score requirements. A debt negotiation program is the ideal solution for people who have bad credit because your credit score has nothing to do with the way in which your plan is structured. The debt settlement professional is only interested in your credit card accounts and how they can be reduced.

– Costs

Any debt relief program is going to cost you money. But with debt consolidation, you will wind up paying loan processing fees, high monthly service charges and you will continue to pay interest on your credit card debt. If you add up the charges you pay on a consolidation loan, you may start to see that you are paying more to have the loan than you did to carry the separate credit card accounts.

When you find the right debt settlement company, you will only pay for the service when it is successful. Aside from a low monthly service charge, your monthly payment is based on your payoff balances. There is no extra interest added on to your balances, and you do not have to pay any loan processing fees.

– Time

One of the reasons why people with bad credit scores prefer debt consolidation loans is because debt consolidation companies spread out the loan payments over several years, up to 10 years and help lower the monthly payments. The problem with that plan is that you wind up paying interest charges on up to 10 years of consolidation loan payments.

A debt settlement program administered by an experienced and professional organization will take anywhere from 24 to 48 months to complete. If you apply some of the money you are saving every month by having your debt lowered, then you can pay that balance of on an even more accelerated schedule.

– The Full Process

A debt consolidation process consists of grouping your debt together, determining how much money you will need to borrow to pay that combined balance down and then shopping around to get you a loan. The debt consolidation organizations leave the possibility of the debt returning open by doing nothing to address the core debt and spending issues.

A debt settlement organization is a professional debt relief company that is experienced in helping people to get their debt under control and develop good spending habits. It is not enough to just move debt around and then add more interest to that debt by putting in into a loan. That does not help your process. With debt settlement, you get a full debt relief process that lowers your debt and teaches you how to avoid it in the future.

When people have bad credit scores, they sometimes feel forced to take bad deals with consolidation loans that have high interest rates and use high monthly fees. The truth is that debt settlement is a much better option for people with bad credit and a debt settlement professional can help you to reduce your debt in as little as 24 to 48 months.

We have experienced financial professionals on staff who are waiting to help you reduce your debt through the debt settlement process. Let our debt relief experts work with you to develop your comprehensive debt profile and develop a plan that will work. Pick up the phone and call us today to get started on the right debt relief program for you. Let us explain why consolidation loans with a bad credit score are not a smart way to pay down your unsecured debts.

Do you qualify for debt consolidation?

Adam Tijerina
Adam Tijerina

Adam Tijerina is a personal finance expert for National Debt Relief, a BBB A+ accredited business offering debt settlement services since 2009. Adam knows a thing or two about debt resolution after successfully settling $43,250 in credit card debt on his own. He has also co-authored two books about overcoming adversity and has been featured on Credit.com and USNews.com. Adam holds a Bachelor’s Degree from Trinity University and lives in Texas with his wife and four children.

Follow Adam Tijerina: Linkedin

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By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
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Moderate National Debt Relief Caller: Charlotte Transcribed WE 1/24/2021 Charlotte: Before I begin, I have to let you know that our call may be recorded. Can you tell me, how did you first hear about our National Debt Relief? JOAN: Oh, I don't know. I don't remember. I don't know how I heard about it. Charlotte: What made you decide to work with them? JOAN: Well, obviously, I needed to consolidate my debt. Charlotte: Tell me about the service program that they provided you with. JOAN: Well, I'm not done. But for me, it’s costly. What I did not like about it was that they add on. They say it's going to be X amount of dollars. But then what they do is they say, “Oh, well, we found another creditor that you need to…” So that'll be at a different part of the month and I don't like staggered bills. If I'm gonna pay a bill, whether it's to the phone company, the insurance company, whatever it might be, I want to pay that bill once a month. That's the only drawback. Charlotte: So let me get this. Normally, they are collecting the bills upfront. And then they work to get them paid off at a different rate. So everything wasn't collected all at once, if that's what I'm hearing correctly. JOAN: No, no, no. Every month, money is taken out of your account. And they pay X amount of dollars. Like let's say you owe $5,000 with Citibank, $500 in Credit One, whatever. They work out a deal with them and then they say, “Well, you have to pay $350 a month.” And they'll pay $20 a month towards -- they give you like around about how long it's going to take. Two years, two and a half years. And then they work it out that way. Charlotte: Now, what did you think about your negotiator? JOAN: I don't know. I just called up. It's a completely different department. So when you call up to sign up, it's very different. I don't remember that. It's just that they collected all the information. It was easy for me. I didn't have to go through and find whatever bills I wanted to put in the debt relief. They did that. Charlotte: So say you have questions or concerns. How did you get your questions or concerns addressed? JOAN: I would just ask and they answered it. They're very helpful like that. They'll answer any questions you have. And if they don’t know, they will find out. Charlotte: So was there not a particular person that you spoke with? JOAN: No, you don’t have one person that you deal with that just handles your account. Once you do – they’re like headhunters. Until you sign up, you're going to have that one person and even other people calling. Once your name is out there, they're going to keep calling you. So, once you sign up, then it's whoever answers the phone. It’s customer service. Charlotte: How comfortable did you feel working with National Debt Relief through this process? JOAN: I felt very comfortable, very safe. I was not worried about anything. Charlotte: Is there anything about this process that you would have liked to seen handled differently? JOAN: Yes. The way the payments come out. I'd rather have them one instead of … Charlotte: Everywhere. JOAN: Right. Well, not everywhere. For the most part, the bulk of them were. But then if there's one here, one there, they don't just extend it to another payment. And then the payments change, like the payment amount. You could pay $20 for six months, and then all of a sudden, it's $80 for the next three months, so you really don't know. Charlotte: So if you have to rate this experience on a scale of one to five, five is you’d recommend to friends, one you're pretty dissatisfied… JOAN: No. I would definitely recommend it to a friend. Charlotte: How would you say working with National Debt Relief has impact your life? JOAN: Well, it did help until I hit a speed bump. I'm in the middle of a divorce and my husband closed our checking account, of course. But so far, as a matter of fact, that's why I thought you were calling. I have to postpone the next month, so hopefully, they'll be able to postpone it, because I've been postponing it for a few months. Charlotte: Would it be okay if I posted your comments as a review on our public website for National Debt Relief? Because you did give us some really good feedback. JOAN: Yes, but not using my name. Charlotte: Okay, I will make it anonymous for you. I will also send over a link so that you can have it as a record for yourself at jdola20@yahoo.com. JOAN: Yes, but do not put that public. Charlotte: Oh, no, no, no. That doesn't go public. Definitely. How would you say working with National Debt Relief has impact your life. JOAN: Well, really, it would have helped if I could have stayed on the program. Charlotte: We’re recorded.

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