A bad credit rating can be stressful and affect your prospects, but a debt loan could still be available to you. Debt Consolidation explains how to repay and manage your debts to obtain a good credit rating.
There are many options open to people with a poor credit rating, and depending on the circumstances, taking out a debt consolidation loan could be a good idea. This can ensure the person's credit record is not further damaged by missed payments, which in the long run leads to better finances overall. By repaying their outstanding debts, the individual can over time help repair their bad credit rating. However, debt consolidation loans are only suitable for smaller debt levels, unless you have an asset that you could secure it against.
If you meet all the criteria, a debt management company could offer reduced payments without the need for a debt consolidation loan. All your existing loans are consolidated into one lower payment to the debt management company, who make distributions to your creditors. You will also receive support and advice along the way.
Even those with a poor credit rating can be awarded a debt consolidation loan, albeit at a higher rate of interest than those with good credit. Another factor in determining loan interest is whether you are a homeowner, which means you can opt for a low-interest secured loan.
When it comes to choosing a debt loan, it's important to shop around and see what different lenders are offering before you sign anything. The terms and conditions, duration of loan and rate of interest are variable depending on the lender and your situation, so make sure you ask the right questions.
A bad credit rating can be caused by missed payments, CCJs, mortgage arrears or defaults, but regardless of your credit status there might be assistance available to you. With the right support and advice, managing your spending and consolidating your debts could put you on the path to financial security and a good credit rating.