Quite unfortunately, getting into debt is a very easy thing to do. Offers for credit to get things that we want for low monthly payments seem to pop up around every corner we turn. Before you know it, the bills are adding up, and you are breaking the monthly budget just to keep the payments up. Once you fall behind, late charges apply, and those can add up rather quickly too. There are ways to get out of that rut though, and I've got some tips on debt consolidation for bad credit that might help to keep your head above water. This post has been written in partnership with Second City Advisors, though all opinions are my own.
How can I get debt consolidation for bad credit with Second City Advisors?
Second City Advisors can help to answer your questions regarding credit card debt, and may be able to help you to keep your finances afloat through a loan. Call them at 800-979-8256 to speak with a personal loan officer. They may be able to help you consolidate your debt into one monthly payment, which might end up being lower that what you are currently paying on multiple debts.
I found a great article from Credit Karma that shares a lot information on how to get a debt consolidation loan with bad credit. Not only do they explain exactly what a debt consolidation loan is in the article, they go into further detail on how you can help your credit, what scores you need as well as the challenges one with bad credit may face when trying to get a loan to consolidate their debt.
Experian also shares some information and advice regarding debt consolidation loans, and goes a bit more into detail on the benefits, and also alternatives to a debt consolidation loan. I know you probably have many questions right now, so I have helped to provide answers to some of the things that you must be wondering below.
How can I get debt relief with bad credit?
Believe it or not, debt relief is possible, even if you have bad credit. If you have a bank account, that is a great place to start, because they want to keep your business. Debt consolidation loans are another option to turn your payments into one monthly payment. Just make sure the interest rate is smaller that your current debt, otherwise you will pay more in the long run. Debt.org is America's Debt Help Organization and has a lot of tips and tools to help you along your journey to being debt free.
How do I qualify for a debt consolidation loan with bad credit?
I found 5 steps to getting a debt consolidation loan for bad credit, and it seems pretty legit.
- Start by checking and motoring your credit score so that you know which loans you can potentially qualify for, without worrying about lowering your score with a hard hit on your credit report.
- It's always a good idea to shop around and compare interest rates and other fees.
- Secured loans are easier to get since you would put up collateral such as a vehicle or other property that you own. If collateral is an option, I would definitely consider a secured loan.
- Asking a close friend or family member to co-sign for your loan is another option, though it is something that many would advise against since money can often ruin relationships.
- If it comes down to it, you may need to just wait and improve your credit. Work on past due accounts first, then work on paying down credit cards, which can help boost your score.
How can you borrow money if you have bad credit?
Bad credit loans are actually a thing, and if your score is too low for another type of loan, this may be an option for you to consider. This article on Debt.org shares all about that, and goes more in depth on what credit scores are poor, good and excellent. They also share how bad credit affects borrowing, and what type of interest rates you may end up paying on certain loans, such as for a house or automobile. They also spell out a number of pros and cons for bad credit loans.
How much debt is too much debt?
Debt to income ratio plays a big role when it comes to your credit. I've heard that a debt to income ratio of 20%-28% is generally considered acceptable. Anything above that may provoke lenders to consider you a credit risk, though some lenders will cut you some slack even if you are around the 38% mark. Of course you may still be able to get a loan, but your interest rate will likely be much higher than if your debt to income ratio was better.
So let us elaborate on that a bit. Let's give an example that you make $3000 each month, and your bills come out to $1500 each month. That would make your debt to income ratio 50%, which is considered very high. If you could knock out $500 worth of bills, then your debt to income ratio would drop to about 33%.
Money and managing finances can be a very tricky slope, and rather stressful. I get it. I think money issues cause me more anxiety than almost anything else, aside from my kids! No one wants to be broke, and we certainly do not want to have to worry about how any of our bills will be paid. That's why it is important to try your best to manage the money that you have coming in, and the debts that you owe going out. If things get too tough, it might be time to seek outside help, which may allow you to regain peace of mind.
How can I contact Second City Advisors?
Call 800-979-8256 to speak to a staff member who can help you.
Will Second City Advisors answer my questions?
Yes, Second City Advisors will help to answer any questions that you may have regarding debt consolidation.