Debt Consolidation with Bad Credit

Debt consolidation is a type of loan that can help you pay off other debts. In addition, this one solution can also free you from complicated and convoluted processes, especially if you have debts from more than 1 creditor. When you have poor credit quality and plan to apply for debt consolidation, then applying for debt consolidation with bad credit will certainly be a little difficult.

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With that poor credit quality, lenders may be reluctant to approve your application, and those who approve you will most likely charge high-interest rates or fees—making it difficult to disclose.

Debt Consolidation Loan With Bad Credit

If you have bad credit, it's a good idea to explore your options. But it's important to know that the options may be limited and expensive, and lenders can target borrowers in your situation. In some cases, you may be better off paying off existing debt without applying for a new loan.

There are potential sources for debt consolidation loans. These lenders can provide loans to borrowers with lower credit scores, but that doesn't mean they approve every application.

To qualify for a loan, you usually need a steady income or other factors that can offset items in your credit history.

OneMain Financial

With a relatively small loan amount, start-up costs, and rather high-interest rates, OneMain Financial may be one of the most realistic options for borrowers with bad credit. If you're having trouble getting approval, you can also pledge collateral to increase your chances. That's a risky move—you might lose the item you promised if you miss the payment—but if you have no other choice, it makes sense.

If you decide to pledge a warranty like your car, consider the risks carefully. Will you be able to start working and earn income if you lose your vehicle? What about transportation and care of family members?

OneMain Financial has a physical branch, and you may be required to go to the branch to complete the application process. However, if you do not live near a branch, you can work with OneMain Financial entirely online.

Before you borrow, review any origination fees—they can be as high as 10% in some states. If you also pay high interest, borrowing can be very expensive.

Avant

Avant offers debt consolidation loans online with no minimum credit score requirement, but borrowers with scores above 600 have the highest approval rates. Avant evaluates factors such as your income and payment history when making approval decisions.

With bad credit, you will most likely pay the highest rates on Avant. Plus, fixed administrative costs add to the total cost of your loan. If it helps you get approval and save money overall, it may be worth it, but origination fees make the most sense when you can recoup those costs over time.

Upgrade

If you want to hear what others have to say about lenders, Upgrade provides plenty of recent user reviews. You should always look at reviews that lenders provide with skepticism, but this information may be useful—even if the negative reviews aren't suspicious. Hearing how others describe the service in their own words can provide clues to help validate whether you're on the right track.

Hopefully, this information about "debt consolidation with bad credit" is useful for you.

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