I Need Money Now!

If you’re looking at debt consolidating loans for people with poor credit, you will have some options to keep in mind for financing.  While many banks and online lenders prefer to work with those that have a good score and payment history, there is a growing market of lending companies and online lenders that are catering to those with a bad payment history.  This could be your chance to borrow money at decent rates.  Some even offer guaranteed approval.  So, whether you’re looking for $500 or $5000, you have some options.

Before You Apply

The lure of fast cash is something we all have fallen for at times.  Something comes up and we need money immediately.  Some look to get $5000 overnight, but those that are willing to wait and do some homework often get by better financially.  Before you apply to borrow money from a lender that promises debt consolidating loans for people with poor credit, it pays to do you due diligence.

Find Your Score:  Are you in the 600-650 range?  If so, borrowing will be possible and a little easier for those in the sub 600 range. Those with a score of 660 or higher can likely get a personal loan for consolidating debt through a traditional lender, like a bank, assuming they have something that can be used as collateral.  Finding your exact FICO score will let you know exactly how hard you will have to dig and what typical interest rates you can expect to pay from banks, credit unions, or online lenders.

Negotiate Settlements:  Perhaps some of your creditors will accept less from you, if you pay them in a lump sum.  It’s not nearly as hard to negotiate a debt settlement with creditor as many people think, especially with a poor economy.  You won’t know if this will work for you as an alternative to consolidating with personal loans until you try. You could quickly fix your poor credit score this way as well.

Make a Good Budget:  Site down and really figure out where you money is going and make adjustments.  You could find that with some minor alterations, you are able to avoid the need to borrow cash completely.  While it’s not instant, you can make good long term strides in rebuilding your score and eliminating the need to rely on banks and lenders so heavily.

About Collateral:  If you have almost anything that you own free and clear, you have a leg up on others.  For example, if you own your car fee and clear and it has a decent value, you can avoid using expensive car title lenders and possibly qualify for a personal loan from a local bank that you’ve done business with in the past, dealing with people you know.  Consolidating debt this way is generally preferential to most.

Past Relationships With Lenders:  Do you have existing debt to lenders?  If so, are you current and kept current on your payments?  If so, the bank may give you a little bit of a pass if your score is low.  If you have a good relationship with a local lender, this could be the best way to go for help when you need money immediately.

Alternative Methods:  If you have collateral, but you know you cannot borrow money due to a very poor credit score, there are some alternatives to consolidating your debt with a personal loan.  If you have something that would serve as collateral, for example, you could simply sell it.  This could be the best option you have, since it won’t cost you any money in interest.  Settlements may also be possible with certain creditors and is something to keep in mind. 

Places to Look for Help

If you need a personal loan immediately, but you have really poor credit, consolidating your debt can be hard.  Still, there are some places you can look for help.

High Risk Lenders:  Of course, those that cater to people with bad scores are out there.  You can find guaranteed approval lenders online.  You need to be careful though, since you could end up paying more interest.

Financing Companies:  These are becoming more popular.  You’ll find standing stores and offices for lenders that cater to bad credit scores and poor folks willing to pay very high rates of interest.  While it can be appealing to many looking to borrow money fast, the interest rates have been known to cross 50% APR.

Banks:  If your credit isn’t quite as poor as you think, the people at the local banks might be willing to offer you a personal loan for consolidating debt.  If you own your own home, for example, it will not be nearly as hard to get some money from local banks.

Pros and Cons

Like anything else in life, there are pros and cons debt consolidating loans, especially for people with poor credit.  Listed below are just a few of the benefits and drawbacks to borrowing money from high risk or high interest financing companies.

Pros:  Rolling debt into one payment is a good way to cut back on your monthly payments.  Not only will you often pay less each month in payments, but the interest is often favorable when compared to revolving accounts, like charge cards.  In addition, you’ll have a chance to build a positive relationship with the borrower, so you can go to them for future needs.

Cons:  Of course, you are simply taking out yet another personal loan, whether it’s for debt consolidating purposes or not.  Even if you have poor credit, you will likely not make matters better over the long term.  Applying for money over and over again damages your FICO even more, making future needs harder to meet.  In addition, there’s not guaranteed that you’ll get a better rate.  In fact, many high risk banks and lenders charge obscene rates of interest these days.  Why?  Because they can get away with it!


Take some of what you’ve hopefully learned in this article and apply it to your situation as you compare debt consolidating loans for people with poor credit.