Could I get a debt consolidation loan with bad credit?
A debt consolidation loan is a way of combining your existing debts to make them easier to manage. You could potentially cause significant savings on your monthly payments.
It is feasible to obtain a debt consolidation loan if you have a poor credit score, but your option for lenders may be somewhat limited. You might not receive the best rates of interest as well as terms. That’s why it is essential to compare deals from a panel of lenders which is where we can help.
Consolidation Help searches across many lenders to find the best loans to suit your needs.
What types of loans could I be eligible for?
You can apply for many different loans you can use to consolidate other debts. They include:
Personal loans
It could be possible to get an unsecured personal loan from a provider who specialises in loans for those with bad credit. But you’ll probably only be able to borrow a small amount, and you could face paying a higher interest rate.
Secured loans
If you own, outright, or part or all of a home or a car, you could use it to secure a better deal for a consolidation loan, even if you have bad credit. The danger with secured loans is that you risk losing your home if you cannot keep up with repayments.
Guarantor loans
Guarantor loans were designed for people with bad credit; guarantor loans must be backed by a family member, partner or friend, who will be liable for the debt if you default. Like unsecured personal loans, they often have high rates of interest.
What can I use a bad credit debt consolidation loan for?
A consolidation loan for bad credit history can be an excellent step toward getting rid of what you owe and putting your financial health back on the right track.
For instance, if you have ₤3,000 spend on a credit card, £1,000 on a store card and ₤6,000 on a personal loan, then a debt consolidation loan for ₤10,000 can clear this and also leave you with one manageable regular monthly credit payment to make. You’ll be able to see what you owe, and also, there is much less danger of missing out on a monthly fee. Likewise, you could locate a lower rate of interest on your consolidation loan, which could lower your month-to-month debt repayments.
Bear in mind that you might end up paying much more in interest over time, and possibly it can take longer to remove your debt, relying on the size of the loan term on your consolidation loan.
Consolidation loans for bad credit FAQs
If you have a bad credit history and a poor credit score, it can seem like the financial offerings are fewer. Nevertheless, with a debt consolidation loan, you can start to settle your creditors while making favourable steps towards ultimately boosting your rating. Some lenders can still accept people with bad credit scores for debt consolidation loans
Getting one new loan to settle other financial debts might have the ability to help you keep your financial resources in control as you’ll only have one monthly payment.
It may not always be feasible to locate a reduced rate of interest compared to your existing debts, but if you can find a much better deal and a reduced APR, you should have the ability to reduce the total amount you need to pay out monthly.
It’s always a good idea to contact existing lenders to see if there are any very early repayment costs. You’ll need to factor in these expenses when exercising if a brand-new loan will undoubtedly save you any money.
You’ll need to work out what your loan will cost you in terms of monthly repayments over the full term. Whether you’re seeking to take a ₤ 5,000 loan or even ₤ 15,000, our helpful advisors can help you with the numbers. How much you can borrow by calculating how much you can afford to pay back monthly and the time you can afford to pay that amount (and at what rate of interest, APR).
You can use our Debt Consolidation Loan Calculator to work out your monthly repayment.
You’ll need to work out what your loan will cost you in terms of monthly repayments over the full term. Whether you’re seeking to take a ₤ 5,000 loan or even ₤ 15,000, our helpful advisors can help you with the numbers. How much you can borrow by calculating how much you can afford to pay back monthly and the time you can afford to pay that amount (and at what rate of interest, APR).
You can use our Debt Consolidation Loan Calculator to work out your monthly repayment.
Although some loan suppliers will insist you have a guarantor if you have bad credit, this is unnecessary with many of our lenders. If you don’t want or don’t have a guarantor, then we will certainly still strive to help you with your debt consolidation without one.
With a consolidation loan, you can settle any unsecured financial debts, which include:
- Credit cards
- Payday loans
- Personal loans
- Store cards/Catalogues
- Overdrafts
