Best Debt Consolidation Loans for Bad Credit of 2022 – Forbes Advisor
A debt consolidation loan for bad credit may not be the best choice for everyone. If your credit is preventing you from qualifying for a lower interest rate than you are paying now, consider the following debt consolidation alternatives.
Improve your credit score first
Good credit comes with many benefits, including the ability to qualify for better financing. If you are currently unable to secure an attractive interest rate on a debt consolidation loan, you may have more opportunities to work on improving your credit rating in the future.
As you create your credit improvement plan, keep this in mind: you may want to adjust your approach depending on whether you’re building credit from scratch or working to rebuild damaged credit. Both processes can take some time, but the payoff from earning better credit can make your hard work worth it in the long run.
Use a debt-repayment strategy
If you have some wiggle room in your monthly budget, a debt-repayment strategy could work well for you. Do-it-yourself strategies like the debt snowball or debt avalanche method will cause you to restructure the way you pay off your debt each month. In the end, each approach has the potential to save you time and money in the debt elimination process.
Get professional help
Credit card debt and other high-interest-bearing debt can sometimes get out of control. If you’re struggling to make even the minimum payments on your monthly loan obligations, it may be time to speak to a financial professional about your situation.
A nonprofit credit counseling firm may have solutions that could help you, including a debt management plan. In extreme cases, you might even want to consult a bankruptcy attorney about plans that can protect you from your creditors.