Ballast Associates Discusses How to Get a Debt Consolidation Loan With Bad Credit

Many of us go through financial challenges. Whether it’s finally pursuing that startup, experiencing a medical condition, or being able to purchase a home, there are many reasons why we accumulate debt.

Nobody plans to be stuck in debt. However, the statistics are staggering about debt in the US. A website named Lexington Law stated that the average consumer debt in the US amounts to $ 11,700. For others, it could be even more due to home and auto mortgages, student loans, and other recurring payments. On average, Americans owe 26% of their income to debt.

When debt is left unpaid, interest can accrue over time which may result to even more debt or giving up properties under equity loans.

What is a good solution to get out of debt?

According to Ballast Associates, a well-known financial advising company, debt consolidation is one of the great ways to help pay off your debt in a more manageable way. Debt consolidation is a process wherein a company offers a loan by compiling your total debt and turning it into a single, lower monthly payment.

Although terms under debt consolidation loan are longer than usual, you can be assured with a monthly rate that you can pay with your present income.

Most people may consider having a debt consolidation loan but are worried that they may not be approved due to bad credit. It is still possible to get a debt consolidation loan despite having a bad credit–Ballast Associates provides insight on how to succeed with this.

Ballast Associates Discusses How to Get a Debt Consolidation Loan With Bad Credit

Find a company that accepts poor credit.

The first step in securing a debt consolidation loan despite poor credit is browsing companies who would offer this in the first place. For example, Lending Tree offers debt consolidation or personal loans even for people with bad credit. It is easier to take out loans from private lenders than bigger companies as larger companies would have more qualifications needed for security.

The only caveat with some personal loans, private lenders, and other companies who are willing to provide loans for those with poor credit are the high-interest rates. If you think that you’d rather get approved despite bad credit with an interest rate that’s a little higher, then you can choose this option.

Verify with your credit union.

Another option which can save you money for better interest rates is checking with your credit union. Your credit union may have debt consolidation offers for lower interest rates even under bad credit. Being a member of a credit union for a longer period of time will increase your chances of getting approved.

Credit unions offer both secured and unsecured loans. Federal credit unions are often the most affordable ones, but State credit unions can also have competitive rates. Another benefit of credit unions is that they can be more forgiving if there comes a period that you’re unable to pay. If you often take out loans and would want lower interest rates, you may consider joining a credit union.

Have a co-signer with good credit.

According to Ballast Associates, having a co-signer with good credit can increase your chances of securing a debt consolidation loan. Usually, debt consolidation companies scan applicants by their credit score. A low credit score is often shunned especially if they are only considering a certain range.

However, some companies are more lenient as they offer the option of having a co-signer. They can also look into the co-signer’s credit score, and this will be a guarantee for them that the debt consolidation loan will be paid off.

Although getting a debt consolidation loan with bad credit may be challenging, be assured that you’re one step ahead towards approval with these strategies

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