While looking for a debt consolidation loan, what if you realise that you have a bad credit history? There is no need to worry about it. You can still apply for help to consolidate your debts with a bad credit debt consolidation loan.
Bad credit is added to a borrower’s name when his credit history has
defaults
arrears
CCJs
IVAs
Or people who have earlier filed for bankruptcy
Through this bad credit debt consolidation loan, the borrower can borrow money at a lower rate of interest to pay off the earlier debts. This amount borrowed is equivalent to the total amount that is owed to different lenders.
This money helps in paying off the debts of these lenders. It is used to remove all the debts. Also, this money is taken at a lower rate of interest. This way bad credit debt consolidation loan serves a dual purpose of removing debts and saving money.
Bad credit debt consolidation loan can be obtained either by secured or unsecured means. Pledging of asset as collateral is required in secured loan. This fetches a lower rate of interest for the borrower. However an unsecured loan can also be obtained for bad credit debt consolidation.
No collateral is required in this but the term of repayment is shorter and the rate charged is comparatively higher. The amount approved for the unsecured bad credit debt consolidation loan is also smaller.
A bad credit debt consolidation loan helps in clearing the bad credit history of the borrower also. The borrower can repay the monthly installments and improve his credit score for the future.
Bad credit debt consolidation loan is a sure way of removing the burden of debt from a borrower. It saves money, removes debts and improves credit history of the borrower.
