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Look in the right place. Most people complain that they are having a tough time getting a debt consolidation loan for people with bad credit, but this is often because they aren't looking in the right place. Most traditional banks are not apt to offer you a loan if you have bad credit. This is because they consider you a high credit risk and due to the economy, they have significantly tightened lending procedures. On the other hand, many lenders specialize in loans for people with a poor credit rating, and will be happy to offer you a debt consolidation loan despite your credit. Therefore, these are the types of lenders you need to be looking for.
Do your research. There are several ways to find these companies; try getting referrals from a traditional bank or finance company, or look in the yellow pages or on the internet for lenders advertising debt consolidation loans for people with poor credit. Once you've found a potential lender, keep in mind that you need to convince them that you are worth the risk.
Practice responsibility. The best way to prove your worthiness is to demonstrate that your delinquent or nonpaying days are over. You must always make the payments on your existing debt obligations on time. In addition, you should do your best to pay more than the minimum payments so that your debt-to-loan ratios become lower and your credit score
improves. By doing this, you show the lender that you are sincerely trying to take control of your unfortunate financial situation and they will be more likely to take a chance on you.
Put up collateral. Another way to get a lender to approve you is to offer them a guarantee that you'll pay the money back by offering collateral. For instance, you could ask them to put a lien on your auto or some other valuable as "proof that you'll pay the loan back". You could then request a loan amount that is less than your collateral. This may help you get approved because it assures the lender they will get their money back.
Choose a reputable lender. Lastly, only work with reputable lenders. There are many unscrupulous lenders out there that prey on people with bad credit. By checking with the Better Business Bureau or conducting a little online research to see if a company has a lot of customer complaints, you'll be less likely to choose a dud. After all, if you're already in a tough financial situation, you don't need to get swindled out of your money or charged an unreasonably high interest rate.
In conclusion, you can get a debt consolidation loan with bad credit, OK? Simply do your research, practice responsibility, put up collateral, and choose a reputable lender. By doing this, you'll get a great debt consolidation loan from a company you can trust. Good luck!Source: ehow.com
Category: Payday loans