Consider debt consolidation instead of declaring bankruptcy. Here are three tips to get a debt consolidation loan with bad credit approved the first time.
Calls from debt collectors and difficulty securing a car loan are some examples of the side effects of bad credit. If your score is less than pretty, you may think you’re stuck with it for the long run. However, getting a debt consolidation loan with bad credit can help you boost your credit score and prevent declaring bankruptcy.
When you consolidate your debt, you’ll make only one payment a month and lower your interest costs. Getting approved may depend on factors like your debt, credit score, and finances. Yet, you can get approved for a debt consolidation loan if you cover your bases.
Don’t know where to start? Here are 3 tips to get your debt consolidation loan approved today.
1. Check Your Credit Report
The first step before applying for any loan is learning where you stand when it comes to your credit score. By law, you can obtain a free copy of your credit report every year. Experian, TransUnion, and Equifax are the three major credit bureaus that record your credit history.
Keep in mind every credit reporting agency records your information, accounts, and payment history differently. You may find different information and errors in each report. It’s recommended to obtain a copy of all 3 reports to verify the accuracy of your information.
2. Compare Several Lenders and Offers
It may be easier to reply to that debt consolidation offer you received in the mail, but it won’t ensure you’ll obtain the best financing. Start by searching online for “debt consolidation lenders near me” to obtain insight into your options. Take a look at their site and even reach out to their representatives to obtain information about their terms.
You should consider using Debthunch offer to compare the best offers available based on your finances. This site matches you with the most affordable lenders after you submit an application that won’t impact your credit score.
3. Consider a Secured Loan
If your credit score is too low to get approved for debt consolidation, you may consider getting a secured loan instead. Lenders will ask you to provide an asset such as a car, home, or money as collateral on the loan.
If you don’t repay your loan, the lender will keep the collateral. Depending on your lender, they may ask you to deposit your collateral in a savings account or certificate of deposit.
You should consider this option if obtaining a debt consolidation loan is next to impossible. Make sure to shop around to choose the best lender and rates before applying for a secured loan.
So You Learned the Best Tips to Secure a Debt Consolidation Loan with Bad Credit, Now What?
Following our tips to secure a debt consolidation loan with bad credit is the first step to boost your credit score and achieve financial freedom. You may think payday lenders are your only option, but that’s far from the truth. Consider shopping around for options from online lenders to credit unions.
You may also try to repay some of your debt to improve your credit score before applying. Keep in mind lowering your debt to credit ratio will boost your credit score making it easier to get approved.
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