If you have several debts through credit cards or loans you might want to give some thought to looking into debt consolidation loans bad credit no guarantor needed. Yes, even with a poor credit rating it may be possible to get a loan to consolidate all your debts and save money.
What Are Debt Consolidation Loans?
A debt consolidation loan is a special type of loan that you take out specifically to pay off all other debts.
You can use a consolidation loan to pay off loans that are not secured. These include personal loans, credit card debts, catalogue or store card debt.
You combine all the outstanding debt you have and then take out one single loan. When funds from the loan are paid to you, you use the money to pay off all other debts and you only have the single loan repayment to make.
There are two types of debt consolidation loan to consider and these are the:
Loans may also have a fixed rate of interest or variable rate so this has to be checked too.
Secured Debt Consolidation Loans Bad Credit No Guarantor
Secured debt consolidation loans may be a better choice of loan to apply for if you have a poor credit rating.
There is a better chance of finding approval for a secured loan than an unsecured as the lender requires you to put something of value up against the amount of money you are borrowing. Generally, this is your home or vehicle.
There is a risk to you that in the event you cannot afford to make the loan repayments you stand to lose whatever you put up against the loan.
On a more positive note is the fact that you do not need a guarantor. This means you do not have to talk to someone about your financial issues and the fact that you cannot get a loan on your own.
Unsecured Loans for Consolidation
The second type of loan that can be used for consolidation is an unsecured loan. While this is better in that you do not have to put anything up as collateral against the loan and you do not need a guarantor, it can be more difficult to find approval for with a poor credit rating.
Whether you will be approved for unsecured debt consolidation loans bad credit no guarantor is going to depend on the lender, your actual credit and the amount of money you want to borrow.
Fixed Vs Variable Interest Rate
Another factor to consider when applying for consolidation loans is whether the loan comes with a fixed or variable interest rate.
With a fixed rate of interest, the APR remains the same throughout the term of the loan. This is good in that you know exactly how much interest is going to be added onto the loan, how much the monthly repayments are and how much the loan is going to cost you in total.
If the loan comes with a variable rate of interest, the APR can fluctuate in-line with the Bank of England base rate, and this means the amount you pay each month could change.
You might end up paying more each month or less, depending on the change to the base rate.
Things to Consider When Thinking About Consolidating Debts
There are some things you should take into consideration when thinking about consolidating debts.
The first thing is to make sure that any loan you take out has a lower APR than what you are currently paying on your loans or credit cards. If you take out a consolidation loan that has a higher rate of APR than what you are paying now you could end up paying more in interest.
You should also factor in any fees that might be applicable to loans and credit card debt you have outstanding. For instance, some loans have early repayment fees attached to them. This means if you pay the loan off early you have to pay a fee and this fee could outweigh any savings you make by consolidating the loans.
When considering consolidating debts you need to make sure that once you pay off your outstanding debt you are not tempted to start using the credit card again or apply for another loan.
When taking out a consolidation loan you could keep the monthly repayment down by extending the loan over a longer period than your current loans. However, by doing so, you will be paying more interest on the loan.
Apply Online For a Consolidation Loan
Finding a debt consolidation loan with a poor credit rating is never going to be an easy task, more so if you do not want a guarantor loan.
If you apply for your loan with our help, we can try to bridge the gap between lender and borrower. There are many benefits to allowing us to search for a loan on your behalf.
We can search for your loan with a huge range of UK lenders. This saves you time when compared to searching with the same number of lenders yourself and having to make several applications. It also saves each application being noted on your credit file, which can go against you.
The lenders that we work alongside will consider your current circumstances along with your credit file. They realise that your circumstances could have drastically changed from when you got a bad credit rating and factor this into their decision. They will look at your credit rating as all lenders do, but also look into the amount of money you have coming in, and what you pay out each month to ensure the loan is affordable.
You will get an instant decision so you are not left hanging around wondering if you will be approved for a loan and often money is paid directly into your bank account, on the same day.
Apply with our help for debt consolidation loans bad credit no guarantor and you get access to some of the most competitive rates for your needs.
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