How Can I Get Out of Debt with Bad Credit FAQ
How can I get out of debt with bad credit?
If you have bad credit you could consolidate your debts with a debt consolidation loan. This involves you paying off some, or all of your existing debt with a new loan.
Debt consolidation could help you consolidate multiple monthly repayments into one monthly payment; this could make it easier to demonstrate a good repayment history, which should help improve your credit score.
Repaying one loan instead of many could also reduce the amount of interest you pay.
Secured loans for debt consolidation may give you a better chance of approval than unsecured loans if you have bad credit.
- Debt consolidation could allow you to pay off multiple debts – like credit cards.
- You will still have debt, but instead of owing multiple creditors, it will be all in one place.
- When paying off debts with a debt consolidation loan, you should prioritise debts that are newer first, or that have the highest interest rate.
Debt consolidation loans are often available to people with bad credit.
For example, secured loans for debt consolidation allow you to use a home or car as security on the loan. This reduces the risk to lenders, so they may be more likely to approve your application than an unsecured lender.
Representative 22.93% APRC variable.
For a typical loan of £26,600 over 180 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £484.00. This includes a Product Fee of £2,660.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £87,030.00. Annual Interest Rates range between 11.7% to 46.5% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
