Who is Saxton Associates? They send out direct mail offering you debt consolidation loans at ridiculously low rates even if you have bad credit. The name may be new but the method is all too familiar. Saxton Associates also goes by the name Hornet Partners, Polk Partners, Ladder Advisors, Corey Advisors, Jayhawk Advisors. They have been flooding the market with debt consolidation and personal loan offers in the mail. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect. The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2020 Reviews, the personal finance review site, has been following this industry for some time now.
What is debt consolidation? It’s the act of taking out a loan to pay off other liabilities. These can include any consumer debt, which are usually not secured. With debt consolidation, multiple debts are often combined into one single large debt that can then be paid off. This type of debt payment has more favorable payoff terms.
This can provide relief to the debtor in question. However, many find it hard to get a debt consolidation loan with bad credit. This is quite natural since people that have bad credit tend to be untrustworthy when it comes to paying back loans. Yet, it’s very often people with bad credit that need to pay off debt the most. If you’re struggling with bad credit, this is one way that you can get debt consolidation.
Why Debt Consolidation is a Good Move for Bad Credit Holders
If you have bad credit, then starting the debt consolidation process can be a good move for you. Bad credit means a FICO score that is equal to or below 669. This is in the range of fair or poor credit. Some lenders specialize in giving people a debt consolidation loan with bad credit. They look at things other than your credit score to deem you worthy. They look at your education background, work history and current income. If these factors meet the general requirements for these companies, they will offer you loans.
These loans often have a much lower interest rate than the rate on your current debt. Hence, even with a poor credit score like 669 or lower, you can qualify to pay these back. Their low interest rates also make sure that you’re liberated much more economically than you were before. You can afford to make better decisions with your money now that you’re liable to save more.
Places you can reach out to get a debt consolidation loan with bad credit are credit unions and online lenders. Online lenders often offer better terms than banks because it’s in their best interest to offer better terms. It’s how they differentiate themselves from the brick and mortar and traditional businesses around. Credit unions are often created to help middle-class workers and blue-collar workers escape the spiral of debt. Hence, their loan repayment schemes have lower interest rates than the banks that they purport to hate.
How to Get a Debt Consolidation Loan with Bad Credit?
There are several factors that play into your request for a debt consolidation loan. Some have been laid out in this piece already like your education, income, and work experience. However, other things that can help you qualify include certain purchases you’ve made that signify forward thinking and financial soundness. Alternatively, you can search for the best deal out there.
Monitor Your Credit Score
The first thing to do is to monitor your credit score for fluctuations. Your financial decisions are reflected in your credit scores. Every deferred payment, every overdue loan is a mark that stays on your credit report for long. The lower the credit score, the higher the interest rates offered on any loan, secured or unsecured.
Your credit score doesn’t have to be the best in the world. Just make sure that it meets the minimum requirements for a debt consolidation loan with bad credit. This can, of course, vary from lender to lender. So shop around and figure out the best fit for you.
Shop for the Best Deal
Don’t go for the first deal that you see. Make sure that you compare and contrast all the options for a debt consolidation loan with bad credit. With online lenders, this can be very easy since soft credit checks provide comparisons quite quickly. This doesn’t even hurt your credit score.
You can also go through the fee structure and repayment terms specified by the credit unions and online lenders. Seek the ones that offer the best terms and ones which don’t affect the cost of the loan. This can take time, but it’s worth it in the end when you have the best deal in hand. It can save you hundreds of dollars, if not thousands.
Get a Secured Loan
As you can probably guess, a debt consolidation loan with bad credit is often unsecure. Unsecured loans don’t require collateral that can pay off a loan partially if you’re unable to pay for any reason. However, if you can’t get approved for an affordable unsecured loan, then you should consider a secured loan. It’s not only much safer than an unsecured loan, but it’s a responsible investment. It will be considered a much more sensible purchase and will perhaps help improve your credit score. It also has a much better interest rate than an unsecured loan.
Know that secured loans often require collateral that can take the form of a vehicle or a home. Hence, it carries risk. Your home or your car or some piece of jewelry can be repossessed if you don’t pay it off. The item or items deemed as collateral should be valuable enough to pay off the loan though.
Improve Your Credit
Once you’ve tried these options to get a debt consolidation loan with bad credit and nothing’s worked, improve your credit. That’s the only way that you can hope to get a loan that will pay off all existing debts. This will be a painstaking process since it’ll require financial planning and cutting down on certain expenses. However, you will have to do so if you want greater financial freedom and better prospects in the future. Otherwise, you may be doomed to the cycle of debt forever.
A few things you can do to ensure your credit gets better include paying your monthly debts on time. You can also pay your utilities on time and work side hustles to improve your payment schedules. You can also check your credit reports and check for errors. If you find even one, you can get the report revised. This is bound to improve your credit score. Even if you improve marginally, it will help you get a debt consolidation loan with bad credit.
If you follow these steps, you may yet get a debt consolidation loan, even if you have bad credit.
