When income tends to fall, the end of the month is more and more difficult and the interest costs are high, debt consolidation is an option to seriously consider to stop the bleeding and make a fresh start. But is it accessible to people with low odds? What are the solutions for debt consolidation in the event of bad credit?
Take control and Request a debt consolidation with bad credit now
Conventional financial institutions typically provide debt consolidation loans to individuals who wish to reduce the number of their monthly repayments on multiple unsecured debts and who:
- justify income above their expenses
- mainly have debts on credit cards
- have a good credit record.
People with bad credit ratings who apply for a consolidation loan typically face refusal from traditional banking institutions and have to turn to iffy credit consolidation.
You can use the net value of your property, which is your market value less the balance of the mortgage, to consolidate your debts. This option makes it possible to repay credit and store finance cards as well as other personal consumer loans and realize significant savings by benefiting from much lower rates than cards, while spreading payments over a period of time. longer period. If this solution brings a real breath of fresh air, it requires in parallel to review its budget to limit its unnecessary expenses and pay off debts as soon as possible.
The consolidation loan from a private lender
In case of refusal of traditional banking institutions because of bad credit, it is also possible to apply to a private lender to obtain a debt consolidation loan. However, this approach is of limited value if the lender offers a loan at an excessive interest rate.
The consumer proposal
If your consolidation loan application has been refused by your bank, you can not consider a mortgage consolidation and private lenders offer you a loan at a prohibitive rate, there is always the solution of the consumer proposal. This approach involves going to a trustee to establish an offer of repayment to your creditors. In other words, you reduce the number of your debts by negotiating your debts down: as a rule, this option makes it possible to very significantly reduce the debt, and to erase up to two-thirds of the amount of the debts. You also pay your debts without interest. The major disadvantage of this solution is that it negatively impacts your rating. However, it avoids the solution of last resort, in other words, personal bankruptcy. And once the proposal is settled, it will be easier to rebuild your credit.
Debt consolidation reduces the number of monthly payments while helping to adjust one’s credit rating. When this solution is not available in a traditional banking institution because of bad credit, one can move towards mortgage consolidation or a private lender. Finally, when none of these solutions is possible, the consumer proposal is a drastic but effective way to reduce its claims and the number of its reimbursements while avoiding personal bankruptcy.