If you have multiple types of debt, it might be in your best interest to consolidate them all into one monthly repayment. One of the main advantages of doing so is that you have just a single monthly repayment to make. If you have a less than perfect credit score you might be looking for debt consolidation loans bad credit no guarantor. So is it possible to get debt consolidation for bad credit without the need for a guarantor?
Why Choose Debt Consolidation Loans
There are many benefits of debt consolidation loans and you might want to consider applying for such a loan in the following circumstances:
- If you can get a debt consolidation loan with a lower rate of interest than what you are paying on any current loans or credit cards;
- If you have more than two forms of debt on unsecured loans, credit cards or store cards;
- If you plan on cutting up any store cards or credit cards once you have transferred the debt to a consolidation loan. In other words, you will not start using the credit cards or store cards in the future;
- You can afford the repayments of a debt consolidation loan;
- You have taken into account any fees or charges that may be applicable. This could be for the new loan or by paying off the existing credit cards or loans early.
Reasons Where It Would Not Make Sense to Take Out Consolidation Loans
Just as there are many reasons above why it might make sense to take out a debt consolidation loan, there are factors where it would not make sense. These include:
- If you are unable to clear off all debts you owe with one consolidation loan;
- The APR on the loan is more expensive than what you are paying now;
- You would continue to use your credit cards or store cards to make purchases and rack up more debt on them;
- You need to take the loan out over a longer term than any of your current debts as this would add on more interest and you might end up paying more over the long run.
Is There Such a Thing As Debt Consolidation Loans Bad Credit No Guarantor?
By now, you should have worked out whether this type of loan is suitable for your needs. The next thing you might be wondering is whether it’s feasible to get a loan without a guarantor if you have a bad credit rating.
It may be possible to obtain a loan with a bad credit rating but there is never any guarantee. UK lenders do check everyone’s credit rating, as they have to do by law. However, some only make soft checks while others look into your credit file more deeply. While you might feel that this is not good news if you have a bad credit rating if you search for loans with our help we can match you with lenders who consider your current circumstances more than the past.
There is certainly such a thing as no guarantor loans. Guarantor loans can be intrusive on relationships and friendships. You can apply for a personal loan to consolidate your debts and pay one monthly sum to clear just one combined debt without the need to ask a guarantor.
Will Taking Out A Debt Consolidation Loan Save Me Money?
Depending on your level of debt, your current financial situation, and what credit you are able to obtain, it is certainly possible that taking out a debt consolidation loan will save you money, both in the long and short term.
By having all of your debts consolidated into one, simple monthly repayment, it can be easier to manage your monthly finances than having to factor in multiple payments on multiple dates over the month. At the same time, you may end up paying less each month, giving you a little more money to spend on everyday essentials, or even put aside for a rainy day!
When taking out debt consolidation loans bad credit no guarantor, you want to check the numbers to ensure that you’re not going to be paying more overall than with your current payment plans. For example, if paying off a loan and a credit card separately will cost you £1,000 in total, while consolidating the repayments into one loan will cost you £1,300, then it make little financial sense to do so. To avoid this, you should always read the small print on any loans before you agree to the terms, and check how much the loan will cost you overall to pay back. And, remember, taking out any loan without a guarantor when you have bad credit is likely to cost you more than if you are able to use a guarantor, so it may be in your best interest to see if a friend or family member is willing to help you out.
What If I Want To Reduce My Monthly Payments With Debt Consolidation Loans Bad Credit No Guarantor?
Often, if you need to reduce your current repayments, you can work with your creditors to come to a new agreement. This is called a Temporary Payment Plan (TPP), and can help you reduce your debts at a rate that is affordable to you for up to 12 months. However, TPPs will affect your credit rating negatively, and make it even harder for you to get credit in the future.
By taking out a debt consolidation loan, it is possible that you will be able to reduce your monthly repayments, which will make it easier for you to repay your debts. Bear in mind, however, that if your monthly consolidation loan repayment is less than your current monthly repayments, or if it is spread out over a longer period of time, you may end up paying off more money in total than if you kept up with your current payment plan. It is always advisable to think carefully about what you can afford both in the long and the short term before taking out a loan.
Can I Take Out A Loan For More Than My Current Debt?
The short answer is yes; you can apply for a loan that is larger than your current debt. However, before doing so, think about why you would want to. If you are hoping to have a little more spending money, remember that you will be entirely clear of debt when you have finished paying off the loan. It is also entirely possible that, by applying for a loan amount that simply covers your current debts, you will reduce your monthly repayments and so will have a bit more disposable income each month than you would otherwise. It is also important to remember that debt consolidation loans bad credit no guarantor are there to ensure that you get out of debt. As with all loans for people with a poor credit history, interest rates are going to be higher than those for people with excellent credit, and so it is better to borrow as little as possible while you clear your debts.
Debt consolidation loans bad credit no guarantor are one way to become debt free by combining all of your existing debts into one affordable monthly repayment. We can help you find lenders who consider your verifiable income more than your credit rating. Our lenders offer numerous affordable loan options with competitive rates.