Struggling with one debt is often bad enough, but if you are finding it hard to keep on top of multiple repayments and to afford the money you owe; it may seem that there’s no escape from the financial tough situation you’ve found yourself in.
However, many of those who owe cash to several creditors have been able to not only make their payments more manageable, but even pay off their debts and free themselves of the burden they’ve been struggling with for so long.
What is debt consolidation?
You may feel that you have to try your luck on the lottery in order to finally rid yourself of all the debt you’ve acquired – but in most cases, the opportunity to overcome your financial problems isn’t too hard to reach. In fact, you could have the option to get onto the right path within days by making a few quick searches on the internet.
Generally, taking out a debt consolidation loan can be the perfect chance to do just that. If you’re lookingfor ways to keep track of multiple debts and potentially save money in the process, consolidating all your debts into one loan may be the ideal solution.
Countless debtors across the U.S have been able to make their debts more manageable and even lower their interest rates (and therefore their monthly payments) thanks to this kind of loan.
Can you consolidate debt if you have bad credit?
Things aren’t always easy for those who have a low credit score – and for those who are struggling to keep up with their current debts and other bills, it may seem impossible to get any kind of help to pay off the money they owe and get their finances back on track.
Fortunately, you’re not the only one who doesn’t have perfect credit– and because of this, many of the companies that offer debt consolidation loans will understand your predicament. While some lenders in the U.S will have a minimum FICO credit score requirement (some can even be as high as 660 for the most useful loans), there are also others that will consider giving you a loan even if you don’t have a great credit score.
Will you have a higher interest rate?
One potential benefit of consolidating high interest debts into one low interest loan is that you can often save quite a bit of cash on your payments. However, for those who have a less than perfect credit score, interest rates are likely to be quite a bit higher.
Generally, the better your credit score is, the better everything will be for you; from a higher chance of getting an approval on a consolidated debt loan, to having a lower interest rate. Even if your score is below average, you may still have a better rate than you did on your previous loans, since you’ll often only be paying interest for one debt, rather than several separate highinterest rates.
Is a debt consolidation loan the right choice for you?
In most cases, almost anyone who wants to make their life simpler by consolidating all the cash they owe to different creditors into one debt can benefit from taking out one of these kinds of loans – even if your credit score is low.
While a bad credit score might not help you to get a lower interest rate than the ones you’re currently having to pay, the main goal of these types of loans if often to make your debts more manageable. So, if you want to take control and start keeping track of repayments, consolidation is often one of the best ways to go about it.