Debt Consolidation When You Have Bad Credit

Debt Consolidation When You Have Bad Credit

Having bad credit is sometimes unavoidable especially if you have already suffered through job loss or illness that left you unable to pay your bills.  Find any kind of loan including a debt consolidation loan with bad credit is difficult.  It is not impossible however, you can find lenders that specialize in debt consolidation when you have bad credit.  Be wary though there are many scams among them too.  Here are some tips to help you find a genuine loan provider.

Ask for referrals

If you have a low credit score then traditional financial institutions aren’t going to be interested in lending you money.  When looking for an institution that will deal with those with less than perfect credit scores then look for a recommendation from legal consultants, your own bank or someone who has been in your shoes.  You want to minimize your risk while dealing with your debt.  Here are some tips on bad credit loans.

Verify the Credentials of the Lender

Always be careful when borrowing money and look into the fine print.  Start by contacting the Better Business Bureau to make sure that your lender has a good reputation.  Are there consumer complaints that you need to be aware of?  Is there a history of fraud or unfair lending practices?  If the company has a long history of complaints then you should stay very far away.  Some states don’t even allow for commercial debt consolidators to do business there, so you also need to check with your state’s licensing board.

Do they Provide Other Services

Non-profit debt consolidation companies are far less expensive than those that do this as a business. If you want to save yourself some money, and of course you do, the always look into the details of the service that the lender provides.  Most will offer you a free consultation and help you put together a budget based on your own financial situation.

Get it in Writing

Before you ever agree to any kind of loan always get a formal loan proposal from your potential lender.  That proposal needs to include things like the lifetime of the loan, the interest rate, how much your payment will be every month and if you are going to use anything as collateral.  Before you sign anything, sit down and read it over carefully first.

Getting a debt consolidation can lead you down the path of financial freedom and help you to repair your credit as well.  Assess any potential lender carefully you want to make your credit score better and not worse.

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