Consolidation loans, particularly those for bad credit borrowers, are usually available through some form of secured line of credit, but for those who are looking for a consolidation option when a bad credit score is in place, there may be other options available. However, consumers need to understand that it will depend on the severity of their bad credit situation as to what options could be available or whether opportunities through a secured consolidation loan or even an unsecured consolidation option will be affordable.
Yet, for those who are looking for a secured loan to assist them with their debt consolidation needs, rates here in July may run from anywhere of around 15% or 20% or higher, but again some consumers may be in a financial position where they can get a much lower rate so it will simply depend on a consumer’s personal financial situation as to what rate they receive. Because of this, research and comparisons must be completed in this area if a borrower wishes to get the best possible rate for their debt consolidation loan. Secured loans, however, are secured by collateral and this is where consumers must also remember that they do stand a chance of losing something that has been offered as collateral, which in some cases may be a home or property.
Understandably, secured debt consolidation options can be beneficial for bad credit borrowers in a similar fashion that a traditional personal loan used to consolidate debt will help those in a decent credit position simply by offering a more affordable monthly payment. Obviously, this is another aspect of debt consolidation that consumers must remember to review in general as some banks may not allow for a fixed monthly payment, which could be problematic for someone having difficulties meeting their current payment obligations.
However, one of the alternatives that consumers may use outside of bad credit debt consolidation through either a secured loan, credit card, or other form of financial assistance plan comes through credit counseling assistance that could set up a program like a debt management plan to help a consumer. Ideally, these options will offer reduced payments on a monthly basis for someone who may be struggling to meet their debt obligations, but this again will require that a lender work with a counseling agency or management company to help reduce a consumer’s debt payments.
Due to the fact that there are negotiations that go on during this process, some officials feel that consumers may be able to contact the creditor directly and ask for hardship assistance, which again may lead to lower payments or a lower interest rate, but for bad credit borrowers this may be a problem if a long history of missed payments or irresponsibility is in place. Yet, consumers who may be able to show that aspects of their financial life have been suffering as of late due to factors like unemployment may have a better shot at working with a particular creditor, as consumers who have hit hard times in the past months or year, but previously had a good record in terms of their payment history, could find more leniency from a creditor and be able to forgo seeking out a debt consolidation loan altogether.