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If you’re struggling with debt – as many consumers are – you may be looking for a way to pay off your bills and get back on track financially. Debt consolidation loans for bad credit profiles are one way to get out of debt, but you may be wondering where to look if you’ve been turned down by your bank or credit union. Before you go down the wrong road, take some time to realize there are choices for you, regardless of your credit history and financial situation. In addition, the more you understand about the differences between the many debt relief options, the more likely you are to make a smart decision and get on the road to financial freedom.
Many people looking for debt consolidation loans with bad credit profiles contact their bank or credit union first. And while it makes sense to do business with an institution that you already know and trust, you may be disappointed if you get turned down for a loan. Banks and credit unions offer a variety of traditional loans and other products, but they typically don’t cater to debt consolidation loans for people with bad credit.
Banks and credit unions often use a risk-based pricing model, meaning the bigger the risk they think you are in terms of repaying the loan, the higher the interest rate they’ll charge you. So even if you get approved for a loan, you could end up paying more in interest and fees than someone with better credit.
So whether you are approved for a loan at a high interest rate, or you get turned down because of your credit, remember there are plenty of other options for debt consolidation loans for bad credit. Just keep doing your research and contact other lenders and debt relief companies before signing any paperwork.
It may sound tempting – get a cash advance on your paycheck, and pay back the money in a week or two. But read the fine print, and you’ll find that payday lenders prey on those who are looking for debt consolidation loans for people with bad credit who need cash right away. Often these consumers feel they have no other option, as either they’ve been turned down by their bank or credit union, or they don’t have time to wait days for an approval. Consumers who opt for payday loans are seduced by the ads promising quick cash with no credit checks.
So what exactly is a payday loan? It’s typically a short-term loan or cash advance intended to tide you over until your next paycheck. And what isn’t it? It’s not a way to get out of debt, stay debt-free, or develop strong money management skills to last a lifetime. Opting for payday loans often leave consumers deeper in debt and somewhat “addicted” to the cycle of getting fast cash whenever they need it. If you’re looking for debt consolidation loans for people with bad credit, you’d be smart to look elsewhere.
Lenders operate differently from banks and credit unions; they focus on offering debt consolidation loans for people with bad credit, as well as those with average or better credit profiles. When you opt for a debt consolidation loan from this type of lender, you’re entering into an agreement for the lender to pay off your existing debts now. You’ll then have one loan – meaning just one monthly payment – due to the lender, which you’ll pay back over a period of time. Debt consolidation loans typically use a risk-based pricing model similar to banks and credit unions, so the interest rate you pay is based on your credit and ability to pay back the loan.
A reputable lender will offer several different debt consolidation loans for bad credit profiles. They understand a one-size-fits-all approach doesn’t take into account your unique financial situation. If you decide to work with a debt consolidation lender, make sure they show you multiple options, and that you understand how each works, how much you’ll pay every month, your interest rate and any fees, and how quickly you can pay off the loan.
Nonprofit consumer credit counseling agencies offer alternatives to debt consolidation loans for people with bad credit. They may help you negotiate better interest rates with your existing creditors or find another way to pay down your debts. And they may sound like the best option available – work with a nonprofit agency that’s looking out for your best interests, right?
Many people assume a consumer counseling agency is the best choice, simply because the words “not-for-profit” imply an agency is helping consumers out of the goodness of its heart. But the only difference between a non-profit and a for-profit debt relief company is that the non-profit doesn’t pay taxes on the money they make. That means they may still charge fees for their services. It’s up to you to do your research to find a company that has a strong record of success getting people out of debt the right way.
When doing your homework, don’t let the non-profit status of a consumer credit counseling agency fool you into thinking it’s the only or best option for getting out of debt. Between debt consolidation loans for bad credit profiles and the alternatives to traditional loans, you have a lot of choices to improve your financial situation.
Debt relief companies, such as the providers of CareOne Debt Relief Services, are another option for people with bad credit. While ultimately the choice is up to you, a debt relief company like CareOne takes into account your specific needs and individual financial situation. This solution may offer everything you need to pay off existing debts and get on the road to financial freedom.
Depending on the debt relief company, they may offer several options for getting out of debt. For example, CareOne provides two plans for consumers; while they do not provide debt consolidation loans for people with bad credit, they work in similar ways and can help you get out of debt and stay debt-free for the long-term.
In addition to these debt relief plans, CareOne provides financial education and support, so that you can stay on track and get out of debt the right way.
Whichever type of lender or debt relief company you decide to partner with, it’s a good idea to review the companies you’re considering, the plans they offer, and their records of success before signing an agreement to do business with them. You can learn more about debt consolidation loans for people with bad credit, as well as loan alternatives, by visiting CareOne’s extensive article library. It’s a great resource to help you make smart financial decisions now and in the future.
A debt consolidation loan can be a great tool for people with bad credit to help them get their finances back on track. By combining your existing bills into one new, monthly payment, you’ll be able to pay off most of your debts and work on becoming debt-free for the long term. But if you’re one of the many consumers with bad credit, you may be wondering whether you even qualify for a consolidation loan.
Because of the economy, millions of people across the country are looking for debt help. If you’re one of those millions, you may be facing overdue loans, calls from debt collectors, and increasing late fees and interest rates. In many cases, the best way to get rid of these debt problems is to work with professional debt-relief provider.
Nobody enjoys paying bills, but if every mail delivery brings more demands for money, the bills are mounting up in a pile, and you’re juggling the debt you already owe with new expenses arriving every day, it’s time to take control and reassess your approach to paying bills.
Making the decision to consolidate your bills with a debt relief plan shouldn't be taken lightly. Despite the proliferation of ads marketing the benefits of bill consolidation, many consumers find that they're able to save time and money by paying off their debts on their own. However, if you're in over your head, a bill consolidation program is one option that can help you get out of debt and plan for your financial future.
Debt consolidation comes in many shapes and sizes, as do the companies that offer ways to manage your finances. From "bad credit" consolidation loans for consumers with less-than-perfect credit to so-called "payday" loans to debt settlement plans, the list is nearly endless. So as a consumer, how do you select the best option for your financial situation? Outline your financial goals, research consolidation companies and review your debt consolidation choices.
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