Debt consolidating loans bad credit
A debt consolidation loan may be a great option for you.But how do you get a debt consolidation loan with bad credit?Many people choose to consolidate debt because of the high interest rates making it hard to pay down the principal balance.Getting a consolidation loan with a high rate just doesn’t make much sense.A home equity loan is also called as a second mortgage.HELOC stands for a home equity line of credit and works like a credit card. A home equity loan will have lower rates than a debt consolidation program.
Rates can be as high as 30% in some cases defeating the purpose of a debt consolidation loan.A debt management plan, or DMP, is offered by credit card debt consolidation companies. What happens in a DMP is your cards will all be closed.The company you choose to work with will negotiate your interest rate down and set up a repayment plan. You will pay one fixed monthly payment to the consolidation company that is then dispersed to your creditors, minus their fees.However, these loans will require good credit history, usually at least a 660 FICO score or higher is required.But this is one of the cheaper debt relief options because it’s a low-interest loan.Many people use the money from a home equity loan to pay off credit card debt.