When you make an appointment to talk to a debt relief specialist, one of the first things he will do is pull your credit report. It is common for people who are seeking debt assistance to have a damaged credit score. Bad credit can affect the ability to get the debt help that a consumer needs like debt consolidation loans.
Late payments lower your credit score. When you get into credit trouble, you start to make your payments late. This circular pattern works to devalue your credit rating considerably.
Another problem you run into with late payments is late fees. These are added to your credit balance and increase your overall debt. Interest is also added to late payments, which makes the situation worse.
Late payments can quickly become missed payments, and that will begin to cause more credit issues. Missing payments is much worse than making payments late. A problem that consumers run into is that they believe they can get caught up the next month. When next month rolls around, two payments are late and there is no relief in sight.
Finding A Solution
All of these elements add up to create bad credit, and it usually happens very quickly. When the debt relief professional pulls your credit report, your score has plummeted and your relief options are limited.
The important thing to remember is that you do have options for debt consolidation loans for bad credit. You should explore all of your consolidation options to find the best one.
Getting approved for a debt consolidation loan when you have bad credit is difficult, but it is not impossible. One of your options is to accept a higher interest rate when you set up your consolidation account.
Before you accept a higher interest rate, you need to make sure that the consolidation loan is actually helping your situation. Add up all of your account payments and see how much they are costing you each month. If the consolidation loan payment is the same or more than your current payments, then the loan is not going to help you.
A solution that debt consolidation experts use for people with bad credit is a secured loan. This is a loan that is backed up by the borrower’s personal property, which is more commonly referred to as collateral.
The interest rate on a secured loan can be negotiated, and it is possible to get a good deal on this kind of a consolidation program. The collateral becomes the hurdle that many people cannot get over.
If you need a secured loan for $20,000 to consolidate your debt, then you need $20,000 worth of possessions that you own outright to secure the loan. Most borrowers require proof of ownership and proof that the item is paid in full.
Whether you have good credit or bad credit, your debt consolidation loan term will be anywhere from seven to 10 years. That is seven to 10 years of interest accruing on debt that you have already held for years.
Consider Debt Settlement Instead of Debt Consolidation Loans
A debt settlement company will negotiate with your creditors and get your debt reduced by up to 50 percent. Then, the settlement organization will put together an account for you that allows you to make one payment to cover all of your debt.
It sounds like consolidation, and it has the same single payment convenience that consolidation has. But it also has several benefits that debt consolidation loans do not offer.
No Credit Check
You do not need good credit to qualify for a settlement arrangement. You can have the worst credit in the country and still qualify for a settlement agreement.
Reduces Your Entire Debt
Debt settlement lowers your balances owed by up to 50 percent, and then combines your accounts without using a loan.
The typical debt settlement arrangement takes 24 to 48 months to complete. Since the debt negotiation expert has lowered you monthly payments considerably, you can apply that extra money towards your account and pay it off even faster.
We are experts in analyzing a client’s situation and putting together the right plan. Debt settlement gives you the convenience of a single monthly payment, but it eliminates all of the baggage that comes with a debt consolidation program.
Our financial experts are ready to help you plan your financial freedom and get on the path to becoming debt free. It is easier than you think when you put your trust in the hands of an experienced debt relief company.
Call us today, and let us get you started on your own settlement program that will lower your monthly obligations and allow you to pay off your debt fast.