Do you suffer from debt and are interested in learning more about your options? Are you worried that your bad credit will limit what’s available to you? The reality is that with bad credit you may have trouble finding help when it comes to taking out a loan to assist you in paying off your debts. This money management tool is better known as a debt consolidation loan, which involves combining or consolidating unsecured debt (like from a credit card, personal loans, phone and hydro bills, etc.) into a single loan provided by a lender. This lender will pay off all of your unsecured debts and then gather the combined sum into a single loan with a set interest rate that is hopefully lower than what you were previously paying.
The problem is that it’s hard to get debt consolidation loans for those with bad credit because you are seen as a risk to the lender. First-tier lenders like banks and credit unions, as well as second-tier lenders like finance companies will do a credit check first before dealing with a borrower. They can and are able to easily review your credit score based on your full credit history to determine how much of a risk you are.
The irony is that these borrowers who are seeking a loan are already in a bad financial situation, and thus probably have a poor credit score. It’s a broken system that leads to too many denials of people who actually need help.
Debt Consolidation Program
There are alterative options, though. A debt consolidation program provided by a non-profit organization like Credit Canada is available to anyone who is seeking debt assistance. There is no pressure or judgement, and their certified Credit Counsellors will take the time to sit and talk with you to discuss all of your debt relief options and which one will work best for you.
A debt consolidation program, like a debt consolidation loan, runs off the same principle of combining all of your unsecured debt, except it doesn’t involve taking out a loan. You will also be working one-on-one with a certified Credit Counsellor who will guide you every step of the way. They will gather all of your unsecured debt and negotiate with your creditors to either lower or stop the interest on your debt. They’ll even deter collection agencies from calling and harassing you about your debt.
Work Together for a Better Future
Working together, your Counsellor will set up a repayment plan with an end date for when you will be debt free. Monthly payments are easy to make and are secured and fully tracked. But that’s not all: they’ll also give you the tools you need to become money smart and more financially secure. You’ll learn how to create and follow a monthly budget in order to track your spending habits and ensure that you’re spending wisely. A budget will also help you save money for a future goal or a rainy day.
After all, it’s not just about paying off your debt, but also about how you can improve your life, both now and in the future. So if you want to make a change, contact a certified Credit Counsellor today and begin to make improvements that will change your life for the better.