Unsecured Debt Consolidation Loans when You Have Bad Credit
It’s not easy to get unsecured debt consolidation loans when you have bad credit. Lenders may try to inform you that you can’t get this type of loan because they think you’re too high a repayment risk. Bad credit is the problem. Lenders see your credit history and decide you’re a high risk. Since you failed to pay some debts on time in the past, why would they believe that you will pay them in the future? That’s why it’s harder to get unsecured debt consolidation loans with bad credit.
Finding Unsecured Debt Consolidation Loans
It’s true that unsecured debt consolidation loans are harder to get when you have bad credit, but some lenders are willing to help you some of the time. These are often lenders who specialize in bad credit loans or sub-prime loans. Some such lenders offer personal loans having fixed monthly payments that you can use to consolidate your debts into one larger monthly amount.
Most unsecured debt consolidation loans with bad credit will have some features in common. First, they will require a higher interest rate than secured loans. Sometimes it’s much higher. For example, if you can get a home equity loan (which counts as a secured loan) for debt consolidation, you might be paying 10 percent interest if your credit is shaky. But an unsecured personal loan might cost you at least twice as much in interest if you have bad credit.
Choosing the Best Unsecured Loan for You
The best strategy is to compare lenders. Get quotes from two or three and look for the best terms and interest rate. That’s how you can find the best solution for your specific situation. And don’t rule out a secured debt consolidation loan. These are usually more affordable, especially when you have bad credit.
Resources for Unsecured Debt Consolidation Loans
For more information on specific companies who provide bad credit loans, see our resource page about unsecured debt consolidation loans with bad credit.
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