What is Debt Consolidation

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What is Debt Consolidation

Is debt consolidation possible with poor credit?

You've dug yourself into quite a hole with several thousand dollars of debt on 5 or 10 different high interest rate credit cards. Your credit score is very poor due to all the debt you've accumulated and the missed payments that have ensued. Given the scenario, you may think that you have a long road ahead of you before you'll get out of debt—and that's definitely true. You might be thinking about debt consolidation and whether or not it's even possible with poor credit. You'll find out about it here.

What is Debt Consolidation?

If you've only heard of debt consolidation, but don't know what exactly it is, it's time to learn. In simple terms, debt consolidation is a technique of paying off debt in which the person who is in debt takes out one large loan to pay off all other loans. The newer, bigger loan is typically a much more secure loan featuring a cheaper interest rate and cheaper monthly payments than the individual loans would have. As a result, hundreds of dollars can be saved every month when using debt consolidation as opposed to paying loans off individually.

But Can a Person with Poor Credit Get Debt Consolidation?

Since debt consolidation features lower interest rates, it naturally relies on the credit score of the individual. It's easy to see why many with poor credit think they will not qualify for a debt consolidation loan of any kind. The thing is, everyone can qualify for a loan, regardless of their credit score, as there is always at least one lender who will loan the money. So if you have poor credit, yes, you can get a debt consolidation loan.

How to Get Debt Consolidation with Poor Credit

Unfortunately, getting debt consolidation with poor credit is not as easy as getting it with good credit, so you're going to have to do a bit of searching around to find debt consolidation loans. You can try looking online for lenders by using Google or any other search engine and typing in terms like “debt consolidation with poor credit” or “debt consolidation poor credit”.

Once you find a few lenders offering debt consolidation for those with poor credit, take some more time to research each of them. Make sure they're legitimate and aren't in trouble with Better Business Bureau or any credit agencies. To do this, simply type in the name of the lender followed by the term “review” and you should find a ton of information.

You should keep in mind that because you have poor credit, you'll usually have a higher interest rate for the debt consolidation; however, it will still be lower than the credit card interest rates themselves, so you'll still end up saving money.