Bad Credit Debt Consolidation Loans – How to Qualify For Bad Credit Debt Consolidation Loans
In many cases, bad credit debt consolidation loans are a great option for borrowers looking to save money by paying off multiple bills with lower rates. However, qualifying for these types of loans can be challenging because lenders typically require good to excellent credit scores and may charge high interest rates on loans for borrowers with less-than-ideal credit. Luckily, there are a few things you can do to increase your chances of approval. These include applying with online lenders who offer less-strict qualifications, securing the loan with collateral or enlisting a cosigner with strong credit.
Debt consolidation is the process of taking out a new loan to pay off several existing debts, like credit card balances. The new debt consolidation loan typically has a lower interest rate than the balances on your existing debt, and you make a single monthly payment to pay it off. The goal is to reduce your debt payments and pay off your balances more quickly.
Turning the Financial Page: How Bad Credit Debt Consolidation Loans Can Help
To qualify for a debt consolidation loan, you’ll likely need a minimum FICO score of 660 and a good to excellent credit history. If you have a less-than-stellar credit score, you can still get approved for a personal debt consolidation loan but will probably need to secure the loan with collateral or find a lender who offers a subprime credit score category.
Online lenders often provide the best options for borrowers with bad credit because they have less stringent qualification requirements than banks and credit unions. They also offer pre-qualification, so you can check potential rates without a hard credit pull. Additionally, some lenders allow you to send your loan funds directly to your creditors, which can help streamline the process and eliminate the temptation to use the money for something else.