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Debt Consolidation Loans for People with Poor Credit History

By Edited Nov 13, 2013 0 0


The importance of debt consolidation loans for people who have a poor credit history is best understood by those who are drowning in a financial crisis.  Debt consolidation with poor credit provides an avenue through which they can avoid a similar situation financially and prevent the status of their credit from deteriorating further.


Sometimes, poor management of finances land us in debt. The thing is, debt does not choose who, it could occur to anyone. It could creep in and the next you know, you’re suffocating in bills and can’t figure out how to get out of it. A borrower is termed as negative credit if they have previously defaulted paying a debt.  This tarnishes the borrower’s credit history, which is the record of credibility enjoyed by a borrower. This means that the borrower has a reduced credibility.  We explore debt consolidating loans people with poor credit below:

What is a Debt Consolidation Loan is all about?

Debt consolidation(58014)

Unlike in the past, debt consolidating loans people with poor credit is now readily available. Poor credit loans now days are readily available in the market. Debt consolidation loans have confirmed to offer the much needed help to people who in the past could not access loans due to their tarnished credit history. With lending institutions stepping in, debt consolidation loans are becoming more appealing plans offering more benefits to individuals. 

Debt consolidation loan restores several huge and small debts that a person could have incurred. In this kind of arrangement, a solitary loan is requested to pay off all the debts that a borrower owes. The borrower is then given adequate time to organize the repayment of the loan given because a loan taken under such circumstances is not repayable quickly.   Borrowers with poor credit history in the past are not necessarily perceived as so for bad consolidation loans. This is because a borrower with poor credit history’s step to take debt consolidation loans reflects their effort to restore his or her credit credibility status hence the debt consolidation loan is made available for people with poor credit history.

Why use Debt Consolidation Loans?

Low credit score

Debt consolidating loans people with poor credit are available in unsecured and secured options. Depending on credit rating and ability to repay, people with poor credit history can apply and access debt consolidation loans worth several thousands of dollars. There are online facilities that enable you to apply for a debt consolidation loan.  Though you still have to pay your debt consolidation loan in full, you are able to have a repayment schedule that is comfortable that enables easier handling of payments, your bills are combined in a solitary monthly payment, reduced stress from calls by creditors and you are able to clear your debts in seven years or even less. Some good reasons why you should apply for a debt consolidation loan are:

    * A debt consolidation loan gives you an opportunity to rebuild your tarnished credit history placing you in a better position to access credit in future.

    * You can access a debt consolidation loan at a reasonably lower interest rate

    * Using an online platform to apply for your loan allows you quick access to lenders enabling you to request and compare their interest rates so you get to pick the lender offering the lowest rates.

    * In case you are not certain about your credit status, you can be able to seek expert opining from financial professional so you know how to handle your situation and which option to go for.

    * While online, use the loan calculator to work out your loan repayment expected of you

Interest on Debt Consolidation Loans

Interest in Debt Consolidation Loans

For people with a poor credit history, a somewhat raised interest rate is charged on the debt consolidation loan. It is important to be able to tell the difference between lenders who charge reasonably justifiable interest rates and those that do not. This is not a difficult thing to do, all you need to do is look and see what other debt consolidation loans lenders are offering borrowers who are in situations similar to yours. If this is not sufficient, you may identify a group of debt consolidation loan lenders and request them to send you quotes which provide you with facts regarding their rate of interest, the duration for which they provide the loan as well as other crucial terms on which their loans are granted. Getting quotes from debt consolidation loan lenders enables you to compare what each lender is offering and select a few lenders for further screening. Once you have selected your debt consolidation loan provider, go can ahead and initiate the process of eliminating your debts.

The process of Debt Settlement

Debt Settlement

The first step in debt consolidating loans people with poor credit is to develop a list of all debts. Usually, the list should be exhaustive in terms of including all outstanding debts. The list is developed together with the individuals who are owed in debt or those who are to be paid, the rate of interest carried by each debt is provided to the debt consolidation loan provider. There is feature in debt consolidation loans; borrowers are not included in the debt settlement process. However, in debt settlement practice, the principle is to maximize savings for the debtor. Creditors are only forced to cancel a specific debt or a portion of it only as a result of suitable negotiation process.


Instead of panicking about managing five or more different bills in a month with high interests, why not access a loan that puts together your bills into a single bill. This will save you big in terms of interest and other related fees. One disadvantage, you still have to clear the entire debt amount. Debt consolidating loans people with poor credit would work for you especially if your bills are many and you are experiencing problems handling them; or if you do not have a lot of money to clear all your debts at once.



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