Debt Consolidation Loans

The sad truth today is that many of us have gotten addicted to using our credit cards. Once we would have only used the credit cards to buy something and then pay it off when the bill arrived. That changed during the era of easy credit.

With easy credit we started to maintain balances. We planned to pay it off over a couple of months. But we kept purchasing and our outstanding balances started to rise. Now we find ourselves drowning in credit card debt. Credit card companies charge high interest rates and if we go over our maximum spending limit or are late with a payment, the interest rates go up even higher.

It has gotten to the point where many of us cannot make the minimum monthly payments regularly. This results in credit scores dropping. Our credit limits start falling with the scores, placing us over the credit limits and raising our interest rates further.

As the credit scores fall we cannot take out any additional loans to help us catch up. We wish we could take out a debt consolidation loan but how can we do this if our credit is bad? The fact of the matter is: we can take out such a loan.

Debt Consolidation Loans Can Make Sense

Once you have gotten to the point where you find yourself juggling your loan payments it becomes very appealing to try and consolidate the debt into a single loan. The idea is to replace all the other payments with a single payment on a personal loan.

Getting a Personal Loan with Poor Credit

If our credit scores have fallen such that we are classified as having poor or bad credit, it is certainly more difficult to obtain a personal loan that will consolidate our debt but it is not impossible.

In order to obtain this type of loan, we need to look beyond the traditional lenders and seek out the lenders who specialize in exactly the type of loan we are pursuing.

Poor credit is only a barrier but it is not an insurmountable obstacle. You need to be open with potential lenders about your situation and you need to be prepared to show them your personal goals for improving your finances through the use of a consolidation loan. Today you can find many online lenders who specialize in granting loans to those of us with poor credit. If you can search the internet, you can find a lender. Do not go with the first name in the search list without first looking at several lenders. Shop around for your best deal.

Many Ways to Obtain a Loan

Admittedly, bad credit makes it more difficult to secure a personal loan that will consolidate your debt. Non Conforming lenders are also adverse to lending to those of us with poor credit. You need to establish other qualifications that demonstrate your ability to repay the loan.

The primary qualification is having a job that provides enough income to pay back the loan. You will need to present the paystubs to show that you have a strong work history. This history has to be at least six months long. You will also need to show your other monthly expenses such as insurance, housing, food, etc.

It helps to have a budget put together that you can present to the potential lender. This shows that you have thought through your finances and that you know what the implications of your debt.

Getting a debt consolidation loan is a great strategy to improve poor credit scores. It will take time but it will get your financial house back in order.