Originally posted on https://bonsaifinance.com/how-to-use-debt-consolidation-loans-bad-credit/
Have multiple outstanding loans that seem almost impossible to pay off? Are creditors calling daily, while the complexity of various interest rates and due dates keeps making it challenging to avoid late payments? Debt consolidation loans BAD CREDIT may be an option. Even those with poor credit can often qualify to consolidate 2, 3, 4, or more loans into one and get better rates and terms.
How Debt Consolidation Loans BAD CREDIT Can Benefit You
With many debt consolidation loans, bad credit is not a barrier to getting approved. So you don’t need to say at the outset, “this won’t work for me because my credit history is damaged.” But why should you want to consolidate your loans? Here are a few reasons:
- Simplicity’s sake. Having to deal with numerous different loans all at once can be hectic and stressful. One loan payment on one due date per month is better just because it’s simpler, for one thing.
- More time to repay. When you consolidate loans, you normally get additional to time to repay your new single loan in full than if you kept the original loans.
- Lower interest rates. Often, though not always, a loan consolidation deal will include a reduction in interest rate as compared to the average rate of the loans consolidated.
- Protecting and rebuilding your credit. By consolidating, many find it easier to avoid delinquent payments, which not only avoids late fees but also helps you to rebuild your damaged credit instead of damaging it further.
Is Debt Consolidation Always The Best Choice?
You may be wondering at this point if using a debt consolidation loan is always the best option. Well, that would be overstating the case to be sure. In reality, it depends on your specific situation. You have to weigh the terms of your existing loans, the terms of the would-be new consolidated loan, and other factors
For many, consolidating is a wise choice and offers many benefits. But you have to decide how much it’s worth it to you to reduce your loans to just one and see whether you can get better terms or not.
Bonsai Finance can help you find a lender who will be willing to consolidate your loans for you. And you can use our search engines to see what kinds of loan terms you would be able to get under a consolidation plan. There’s not harm in checking, and many stand to benefit from loan consolidation – so why not at least give it a look?
What About Consolidating Student Loans?
Not all student loans can be consolidated, but a large percentage of them can. And student loan consolidation is a big part of the consolidation market today. That’s not surprising, considering that most who attended college, community college, trade school, or grad school have 5 to 10 or more individual loan debts all set at differing interest rates.
One reason to consolidate student debt is to achieve a single, overall lower interest rate that you lock in for the life of the new, consolidated loan. The fact is, interest rates on student loans can change with every passing year – so you may be paying more than the current rate. Consolidation can bring it all to the current, lower rate.
Also, if you have enough equity in your home, you can often consolidate student loans by taking out an equity loan that pays them off. You then just repay the equity loan, which replenishes the equity in your home, rebuilds damaged credit, and also allows you to deduct the interest paid on the consolidation loan from your taxes.
At Bonsai Finance, we can help you understand how debt consolidation loans BAD CREDIT ACCEPTED can help you repay your debt and rebuild damaged credit scores.