How to Consolidate Debt Before Applying for Bad Credit Loans
If you have a large amount of credit card and other high interest date, a debt consolidation loan can save you a great deal of money. But if your credit score is less than stellar, getting that loan can be a difficult task. Fortunately, there are some strategies you can use to reduce and consolidate your debt, even before you apply for the bad credit loan you need to get a handle on your personal finances.
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Instructions
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Make a list of all your debts, including the total amount you owe, the required monthly payment and the current interest rate. Rank your debts, listing the highest interest rates first. Getting these debts paid off, or the interest rates lowered, will give you the biggest return on your time.
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Contact your creditors, starting with the highest interest rates. Ask to speak to a supervisor, since the front line operators will not have the ability to change the terms of your repayment or your interest rate.
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Explain your situation, and why you need to renegotiate and consolidate your debt. In some cases credit card companies and other creditors will be willing to drop your interest rate, especially if you have consistently paid your bills on time.
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Check your credit report for errors that could be further damaging your credit score and hurting your chance of getting the loan you need. Go to Annualcreditreport.com to access your report. This is the official site that entitles consumers to a free copy of their credit reports from all three major credit reporting agencies.
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Check with the bank where you have your personal checking and savings account to get the debt consolidation loan you need. You might also want to check with your local credit union, since these organizations often offer better rates and more generous standards than traditional banks.
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References
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