Consolidation Loans With Bad Credit: 3 Ways They Can Improve Your Financial Position

As debt mounts, the pressure to repay them increases dramatically. But while the simple solution is obvious, the reality is that the ability to pay lessens as debts rise. The most practical solution? A consolidation loan, with bad credit borrowers getting the funds needed to clear their debts in one go.

Of course, there are other ways to get rid of debt, but not all of them have a positive outcome. Filing for bankruptcy, for example, can see the debt lifted with the minimal settlement payment made (often nothing paid) but it can affect your credit rating for up to 10 years. With the right debt consolidation program, however, the consequences are all positive.

There are several aspects to getting a consolidation loan that must be addressed if the program is to be as effective, but the advantages are significantly greater than any compromise that may have to be made. Here are just 3 of them.

1. A Clean Slate Through Consolidation

Consolidation is not about getting off paying your various individual debts, but is really about replacing them with a more manageable single debt. To this end, taking out a consolidation loan with bad credit is the most practical way to clearing the credit slate and starting again.

For example, if a person as 5 individual loans to repay each month, they have to manage 5 different repayment schedules, 5 different loan balances at 5 different interest rates. This can be a nightmare to manage, but with a debt consolidation program, everything is melted into one payment on one repayment schedule.

And with the slate cleaned, the pressure is lifted for the long term with the only obligation being to repay the consolidation loan each month, over the duration.

2. Free Up Extra Cash

It is one thing to lift the pressure of repaying mounting debts, but it is another to improve the living standards for the borrowers themselves. But even when securing a consolidation loan with bad credit, this is the outcome. How? Because it also frees up extra cash.

Typically, the problem with repaying the original loans is that there is not enough cash to hand to make the repayments. As the arrears build up, the situation worsens and eventually no payments can be made at all. Through a debt consolidation program, the total debt is restructured to lower the monthly obligations.

For example, if repayments on 5 loans amounted to $1,000, the lower interest rate and longer repayment term on a consolidation loan can see the obligation fall to just $500. That leaves an extra $500 to hand every month to cover other bills and expenses.

3. Restore Credit Reputations

While effective debt management is the key purpose behind consolidation, there is another positive consequence – restoring your credit reputation. This occurs because by securing a consolidation loan with bad credit, your credit scores rise.

Unlike other debt management initiatives, a debt consolidation program buys out all of the debts so they are marked down as having been repaid in full. This fact means that your credit score is increased, thus moving the borrower into the good credit range.

Perhaps more importantly though, the reduction in debt repayments means the debt-to-income ratio is improved too. And since this is the key factor in all loan approval processes, the consolidation loan can make a huge difference to future loan applications too.

Bad Credit Loans For Nurses – An Answer To Your Fiscal Worries

Monetary demands are ever increasing. Therefore, in particular for nurses who face a problem of availing advances because of their poor financial status there is a solution in the form of bad credit loans for nurses. These finances help nurses to satisfy their requirements without any difficulties. Hence, they prove to be an answer to all fiscal worries for nurses.

The amount that can be acquired through this form of credit extends from £200 to £25,000. This range is sufficient since it corresponds to the cost of demands including the purchase of a car or the renovation of a house. At the same time, the applicant must keep in mind that this amount is repaid within 1 to 10 years.

The applicant also benefits as these advances are available in the secured as well as the unsecured form. Thus, the borrower gets the opportunity to make an appeal through anyone of these formats. According to secured advances, the applicant can draw a large amount as compared to unsecured advances due to the pledging of collateral. On the other hand, the applicant is entitled to pay a high interest rate on unsecured loans.

The lender puts forth an eligibility criterion which is to be followed. He must be a UK citizen to apply for this form of cash. At the same time, he must attain 18 years of age or more. He is also required to maintain an active bank account and must work on the basis of a monthly income.

There is an advantage for the applicant to sit in one place and register his application with an online lender without getting out of the house. Therefore, this method of application for a loan is very beneficial as it provides all facilities to the borrower without any processing fees. Thus, it is significant due to its easy availability.

Getting Consolidation Loans With Bad Credit: Making A Difference To Credit Card Debt

There can be no doubt that credit cards are a major contributor to personal debt. In fact, in the US, the average homeowner has 4 credit cards creating a combined debt of as much as $50,000. So how can the problem be dealt with? Thankfully, being able to get consolidation loans with bad credit means there is a way out.

With the exception of a mortgage, most Americans count their credit card debt as their most worrying debt. This is partly because of the prevalence credit cards have in society, with most consumer spending being done via these plastic cards. As a result, clearing this debt alone can make a huge difference to the overall financial state of an individual.

Of course, having low credit scores means securing loan approval can be a challenge in its own way. But lenders are always open to financial solutions. With a consolidation loan, the intention is clearly constructive so approval is more likely than for regular loans. But can this loan really make a difference?

Clearing Your Credit Card Debt

The short answer to that question is Yes. What is more, because getting a consolidation loan with bad credit is not particularly difficult, it can be have an immediate effect on the financial status of the borrower. All that is needed is to secure the right terms.

Consolidation is an effective strategy because it gathers together the balances on multiple debts and replaces them with a single loan. With credit cards, for example, 4 cards with a combined balance of $40,000 can be cleared by a single $40,000 loan.

The advantage is that the credit score of the borrower is adjusted upwards to reflect the fact that these dents have been cleared. But there are other advantages to opting for a consolidation loan that show the move is worthwhile.

Lower Debt Repayment Costs

One of the biggest problems with credit cards is the interest rates charged, and the high costs that can be incurred so quickly. It does not take long for the debts to mount and the trouble to begin. But even when getting a consolidation loan with bad credit, the costs involved in clearing the debt can be much lower.

The simple reason is that the interest charged on 4 credit cards with late balances is much higher than the interest charged on a single loan repaid in line with an agreed schedule. In fact, by securing loan approval, even when the loan is $40,000, the repayments can be significantly less than the monthly minimum repayment.

The result is that funds otherwise eaten up by a credit card debt are now be freed up, and can be diverted to other debts that may need attention. In this way, getting a consolidation loan just to repay credit cards has a positive domino effect. However, the loan might also be large enough to cover all debts.

Choosing A Debt Consolidation Company

Banks and other lending institutions can offer relatively good terms to individuals seeking consolidation loans with bad credit. But these loans are usually restricted in size to perhaps $50,000. When the debt is more, then a debt consolidation company is the best option.

The companies specialize in clearing debts, especially credit card debt, and can help in instigating a strict financial schedule that should see your debt fall steadily each month. These companies will effectively clear your debt on your behalf, then accept repayments over an agreed period of time.

There are advantages, of course, to securing loan approval from regular lenders, but the key advantage of a debt consolidation company is that they take over your finances, thus removing the risk of failure. A consolidation loan is effective, but only if the debtor can stick to the schedule – which is not easy.

Debt Consolidation Loans With Bad Credit: Solving Financial Woes In One Fell Swoop

The pressure created through quickly mounting debts can cause real chaos. It does not take long for creditors to begin to demand payment, and unless something is done to deal with the problem, bankruptcy becomes a real possibility. So what is the solution? Well, it is not difficult to secure a debt consolidation loan with bad credit, and to clear the troublesome debts in one go.

The challenge of clearing existing debts, and lifting the weight that can cripple even the hardest working of us, is no light matter. It usually requires great discipline to take control of debts, making it extremely difficult to achieve independently.

A precisely tailored consolidation plan can make a real impact, and a debt consolidation loan provides the means to restructure the money owed into something that is manageable to handle. But how is this possible, and what are the terms that should be sought?

How Consolidation Is The Answer

Applying for a debt consolidation loan with bad credit is a good decision, but it may seem strange that a new loan can actually make your debt situation better. Knowing how consolidation works is the best way to ascertain the effectiveness of the strategy. In its simplest form, consolidation replaces multiple debts with a single loan, thereby removing the complexity and lessening the burden.

The biggest problem with multiple loans and debts is that they each have their own terms. So, 5 loans will have 5 different interest rates and 5 different repayment dates. That means the amount of interest is higher than it needs to be, but clearing existing debts with a single loan means a single interest rate is paid.

And even the principal if the debt consolidation loan is $50,000 to buy out the individual loans, the terms can be much better than those original debts combined, making it much more affordable than the original deals.

What Terms Should Be Sought

Of course, applying for a debt consolidation loan with bad credit is one thing, but securing terms that make it worthwhile is another. By and large, lenders offering consolidation packages are willing to offer very flexible terms, but the key issues are the interest rate and the loan term.

The interest rate can be quite low, but what is most important is that the rate is significantly lower than the average rate charged on the existing loans. That way, clearing existing debts and replacing them with a new loan can be accomplished while making savings – as much as 50% on monthly repayments.

Crucially, however, it is the size of the loan principal that makes the biggest impact, and this is where the loan term comes in. With 5 loans to pay each month, the total sum could easily reach $1,500, but even a $50,000 debt consolidation loan repaid over 10 years could be half that amount. The longer the lifetime of the loan is, the lower the required monthly repayment.

Considering a Consolidation Company

When it comes to applying for a debt consolidation loan with bad credit, there are two chief options. The first is to approach a lender (traditional or online) and apply for a loan large enough to clear existing debts. While securing a large loan might be difficult usually, if the purpose is known to be debt consolidation, approval is more likely.

However, there is no guarantee of approval and this means that the problems might only persist. Another option is to approach a debt consolidation company, professional service providers who will buy out your debt and then receive monthly repayments directly.

Of course, this option is a little more expensive as there are fees to pay on top of interest on the debt consolidation loan. Still, the cost is manageable, and progress in lifting the debt is certain to be made.

By: Mark Venite

Debt Consolidation Loans With Bad Credit: Clearing Debts With One Affordable Payment

Due to the current economic climate, the number of people with mounting debts and plummeting credit ratings is growing all the time. In fact, bad credit lending experts have never had it so busy. But what if the debt has become so much bankruptcy is looking attractive? Applying for debt consolidation loans, with bad credit a feature or not, is a popular solution.

The whole concept of consolidation is to provide a practical method of clearing debts immediately, leaving a clean slate from which to rebuild your credit reputation. But while this route is designed specifically for those in worsening financial situations, not everyone can qualify for consolidation.

Like all financial offers, there are conditions that must be satisfied first. However, with the right debt consolidation loans, with the correct loan terms secured, the chance of sustained financial recovery is very strong. That way, the same problems can be avoided.

What Is Debt Consolidation?

It might seem on the surface as though seeking a debt consolidation loan with bad credit is little more than taking on another loan. The fact that existing debts are proving too difficult to handle suggests securing any new loan would only be foolish.

But consolidation is not about taking on another debt – it is about replacing existing debt with a more manageable debt. Consolidation means clearing debts immediately, with a single loan and then repaying that loan in monthly sums that are significantly less than the original repayments.

For example, a debtor may have 5 loans with 5 different interest rates. The combined monthly repayments might add up to $1,000. However, through a debt consolidation loan, all of these loans are paid off, with the new loan requiring repayments of just $400 per month.

Benefits of Choosing Debt Consolidation

For those who successfully secure a debt consolidation loan with bad credit, the benefits are almost certain to ensure their return quickly to a strong financial position. However, it would be a mistake to think that the debt is simply gone. It is more accurate to say it is restructured.

It is true that clearing debts immediately has a definite positive effect on the financial situation, but more important is the potential long-term benefits that exist. For example, with each debt repaid, the credit report is updated, and the credit score is adjusted accordingly. With 4 or 5 loans cleared in one go, that means the credit score jumps significantly.

Another benefit is that extra cash becomes available. A single interest rate charged on the debt consolidation loan helps lower the expense, but through a longer repayment term (in some cases 30 years), the size of the repayment sum is much lower. Therefore, the repayment sum is much more affordable.

Qualifying For A Consolidation Program

But what is needed to qualify for a debt consolidation loan with bad credit? And how can an applicant be sure to secure the best possible program terms? The criteria are pretty basic, with applicants needing to be over 18, to have a reliable source of income, to be full-time employed for at least 6 months and be a US citizen.

Since clearing debts immediately is the purpose of the loan, there is little worry over debt-to-income ratios, but lenders will consider the degree of improvement consolidation will actually have. If the improvement is not much, then the application may be rejected. This, however, is extremely unlikely.

Finding a lender willing to grant debt consolidation loans is pretty simple too, but getting the best terms usually means looking online. There are also professional consolidation companies but they are more suited to clearing very large debts, and will charge a fee.