Bad Credit Personal Loans: Getting Out of The High-Debt Low-Credit Cycle
For far too many Americans, high debt loads make bill payments very stressful. In many households, there is barely enough money to cover the minimum payments on debts, which leaves very little cash for everyday expenses. Carrying a high debt can lower credit scores, which can mean higher interest rates and even more expensive debts. This can quickly become a vicious cycle that can lead to bankruptcy. Debt consolidation loans can be one way to get control of debt, but for those who already have poor credit scores, getting this type of loan is tricky. Bad credit personal loans and bad credit consolidation loans can be the answer.
To understand how bad credit personal loans and bad credit debt consolidation loans work, you need to understand credit scores. Your credit score is based on your debt load, your promptness in paying your bills, and other factors. In the US , three major credit bureaus gather information to calculate your credit rating. You can look up these credit bureaus (Equifax, Experian and Trans Union) in your phone book and call them to request your credit score. Your score will be a three digit number between 300 and 858. If your score is between 720 and 850, you will generally qualify not only for a traditional loan, but also for prime rates. Most lenders will consider you a good credit risk and will offer you their best rates to get your business. If your score is 640 to 720, some traditional lenders will be willing to give you a loan, but you may not get their best rate. If your score is around 640 and lower, you are a candidate for a bad credit loan. You can usually get a bad credit loan as long as your score is no lower than 500.
If you get a bad credit personal loan, you can pay off your debts and have one large debt. This means that your overall interest rates will be lower and your monthly payments will be smaller, so that you can afford to pay off your loans more quickly. As you pay off your debts, you can enjoy better credit scores and better interest rates through refinancing.
If you want to see how a bad credit personal loan can help you, fill out the no-obligation form online or call one of the bad credit loan experts at Lowest Mortgage Rates. We can make mortgages and loans affordable. Match with Lenders now!