Are You a Homeowner with Bad Credit Who has Been Turned Away for a Debt Consolidation Loan?
For most people, there’s a pretty good chance that debt has been a problem at one time or another. Debt impacts so many people and homeowners are no exemption to this. No matter the situation that led to debt, getting out can be difficult and frustrating. Dealing with multiple credit card companies and varying interest rates makes it challenging to manage and pay everything off. You can try to you’re stuck with high-interest rates, it’s hard to make progress.
Debt is not a problem that’s going away any time soon – according to the latest figures from Statistics Canada household debt levels in Canada are going up. As debt goes up and income does not, more and more home owners find themselves dealing with high interest debt. Debt consolidation can be one of the best ways to manage your situation. By consolidating your debt to one single interest rate, you can move forward and improve your finances. Even if you have poor credit right now, you can benefit from a consolidation loan. Here’s what you need to know about debt consolidation loans for homeowners with bad credit.
What are Debt Consolidation Loans?
When looking at your debt, there’s a good chance that you have several loans — each with its own minimum payment and interest rate. Trying to keep track of all that can be a daunting task. Plus, the money you can put toward your debts is split up, so payments are largely eaten up with interest charges, rather than reducing your principal.
Debt consolidation is a way to change this. You get a new, bigger loan and use it to pay off your smaller debts. With your smaller debts paid off, now you only have one payment and one interest rate. The net result is that your new payment and rate are actually lower than what you were paying in total before.
With debt consolidation, you have the opportunity to simplify your finances, put more of each payment toward reducing your debt, and get out of debt faster.
How to be approved for a Consolidation Loan
While debt consolidation can help you get past your debt, the reality is that it’s not always easy to make it happen. Getting a debt consolidation loan can be challenging — especially if you don’t have a conventional situation.
Many lenders look at your credit score and income stability when making these decisions. If you’ve had credit problems in your past, or if you’re a business owner without a regular paycheck, it might be hard to get approved for a debt consolidation loan at one of the big banks.
This is where debt consolidation loans for homeowners with bad credit can help.
Home Equity and Debt Consolidation
One way to get around some of the requirements associated with debt consolidation loans is to secure your loan with the equity in your home. If you’ve built up equity over time, you can use that to your advantage. Often, a home equity loan comes with a lower interest rate than an unsecured debt consolidation loan. So, you might get an even better rate, saving more money on your debt.
Unfortunately, with more “traditional” banks, you might still have a hard time getting a debt consolidation loan. This is because your credit and income is still a major consideration for the big banks. So, even if you have plenty of equity to secure your loan, you might still be rejected on the basis of your less-than-perfect credit.
Happily, the big banks aren’t your only option if you want a debt consolidation loan based on the equity in your home.
Private Lenders Offer Debt Consolidation Loans for Homeowners with Bad Credit
Rather than relying on the big banks and their methods of credit scoring, you can get help from private lenders. These private lenders don’t face the same restrictions that the big banks do. In fact, in many cases, you can get a home equity loan for debt consolidation — no matter your credit score — because private lenders only care about your home’s equity.
Private lenders know they’re making an investment, and they know the equity in your home is powerful security. As a result, many of them won’t even ask about your credit score or your income stability. A company like TurnedAway.ca can help connect you with private lending partners who are ready to make a deal based on the equity in your home.
A Word of Warning for Homeowners…
Be careful when getting a debt consolidation loan using your home equity. Because you’re securing the loan with your house, you run the risk of losing it. If you fall behind in your payments, the lender can claim the home. Before you consolidate your debt, make sure that you can afford your new payments and make sure that you are working with a reputable broker. Your broker should specialize in working with bad credit home equity loans as they will be able to provide more options.
On top of that, it’s vital to understand why you’re in debt in the first place. You might have run into medical or work problems, or maybe a change in life circumstances knocked you back. Whatever the case, examine how you can stay out of debt in the future. Working with an experienced broker, they will help create a plan for living within your means so you don’t run up new debt.
Bottom Line – TurnedAway.ca Can Help!
Debt consolidation can be a great tool to help you take charge of your finances and get back on track. Even if you have bad credit, it’s possible for you to get a debt consolidation loan, especially if you have equity in your home.
Consider contacting TurnedAway.ca for more information about debt consolidation loans for homeowners with bad credit, as well as for other tools and resources that can help you make the most of your home’s equity. We offer free consultations, you can speak to us by phone 1-855-668-3074, or you can complete our online application by clicking the link below.