How to Get a Consolidation Loan with Bad Credit: What You Need to Know

Having bad credit and getting a loan isn’t impossible. But it isn’t easy, either. Learn how to get a consolidation loan with bad credit, today!

When you’re overburdened with debt, it can be easy to get discouraged. You’re constantly called by creditors and they contact your friends and family when you don’t answer.

They may threaten you with civil court proceedings. You’re paying many different places each month and it’s hard to keep track. It would be nice to have one single loan to deal with, but you don’t know how to get a debt consolidation loan with bad credit.

You’ve missed payments and your credit score is low, so how can you get a loan? Don’t worry, we’ll explain how you can get a consolidation loan despite your bad credit.

How to Get a Debt Consolidation Loan with Bad Credit

The hardest part of being in debt to several different places such as credit card companies is keeping track of everything. You may have $2000 in debt to one card that’s due on the 12th of each month and $4,000 to another card due on the 15th, etc.

You could have seven different payment amounts due on seven different days. A debt consolidation loan removes all those dates and lets you cover everything in one loan.

When you have bad credit, you can struggle to find a lender that will give you a loan at an interest rate that’s better than the credit cards, but you can do it.

Research Your Options

There are many different lenders out in the world and with the Internet, that number increased 10 fold. If you have a credit score of about 580, then you’ll likely be able to find a lender online or locally that will provide you with a debt consolidation loan.

With a score below 580, it is more difficult, but don’t give up. Each lender such as Bonsai Finance has different criteria for their loans and you may find one that will give you money. Keep in mind the interest rates are likely higher, but it might be worth it to get the debt off your back.

Consider Using Collateral

When a lender looks at your credit score, it’s evaluating your risk. The lower the score means the higher the risk of default. If you have some type of collateral to put up against the debt consolidation loan, then you can lower your overall risk.

For example, you can use the equity in your home or the title of your car. If you default on the loan, then the bank can take the house or the car and sell it to recoup some of the lost money.

You may not want to risk these items, but it may be the only way to get approved for a loan.

Get a Co-signer for the Loan

Do you have a close relative that has a good credit score? They might be able to lower your credit risk by co-signing for the loan. This means they attach themselves to the loan, so if you default, they’re responsible for picking up the slack.

Be careful because if you default and they’re forced to take over, then it can cause animosity.

You Can Get Out of Debt

If you wonder how to get a debt consolidation loan with bad credit, then this article hopefully answered your questions. It’s possible to get ahead of debt, so don’t give up.

For more information about debt consolidation loans, please explore our site.