Having a bad credit score could be a disadvantage when it comes to your borrowing options. But there are still many people with a credit card who have not been made aware of the alternatives they can get for a bad credit card consolidation loan.
Before you get too discouraged about your bad credit, there are several options available for you that can help you in repaying your debt. Bad credit does not mean you will have no options available to you. In fact, it could mean you can take advantage of the many benefits available to you.
One option you have when it comes to bad credit is credit counseling. In this situation, you would first be referred to a credit counselor who would work with you on how to manage your money better. This counselor would be able to guide you to the right decision if you apply for a consolidation loan.
Some companies offer a consolidation program for credit cards. With this kind of program, you would pay one loan and one payment to the company instead of paying multiple loans and payments. You would still have to make the monthly payments but you only make one payment to the loan company instead of several.
In order to do this, you would have to combine all of your credit cards into one debt. Since this is one debt, it is a little bit easier to handle. You will not have to worry about several creditors calling you or the interest rates that come with each of the credit cards.
As far as payment goes, the consolidation companies would offer you a deal that would allow you to consolidate the entire amount into one payment. The terms would be the same as the other payment options. Since it will be one payment, you can easily manage your finances and save up on all the extra fees that came with each of the credit cards.
While you may be thinking this would be a lot more expensive than just taking out a loan, it is actually not. These consolidation loans do not offer any rate hikes. The interest rates are also low. They can be found at any financial institution that is willing to lend you money.
It is important to know though that the fees associated with bad credit consolidation loans are pretty steep. When you compare this type of loan to other forms of loan, the fees charged are going to seem pretty high.
However, if you are interested in consolidating bad credit into a loan, then these fees are going to be a big factor to your decision. To avoid them, you will need to make sure that you are going to a reputable lender. There are plenty of companies that are not willing to take on bad credit borrowers.
When searching for good credit consolidation loans, you will want to check the reputation of the lender you are considering. Make sure that you are going to a company that has been in business for a number of years and is a member of The Association of Settlement Companies.
Also check with your state’s department of consumer affairs and ask for the name of a company that has been approved by the department. By doing this, you will have a better idea of the most legitimate company available for bad credit consolidation loans.
You may be wondering what bad credit consolidation loans have to do with credit cards and it is possible that there is some connection. However, you can use both programs as a way to help manage your debts and reach a debt free lifestyle.