Are you in debt and looking to consolidate? If so, it’s important to know what bad credit debt consolidation loans are and how they can help you.
This guide walks you through the basics of these loans and outlines the fees and how to check your credit score before applying.
There are many types of debt consolidation loans in Australia, but the main idea behind them is to provide an easy way for someone with bad credit to pay off their debts quickly and easily.
In simple terms, a debt consolidation loan is when you take out one single loan to pay off multiple smaller ones.
For example: if you have $10,000 worth of credit card debt spread across three different cards at different interest rates, a bad credit debt consolidation loan will allow you to take out one larger loan with lower interest rates which could significantly reduce your overall cost per month or year.
In this case, this could be beneficial because now, instead of paying $300 each month in minimum payments on three separate cards (and only being able to pay down about $2-3k over two years), with your new low-interest loan payment ($400) combined with the extra savings from paying less interest each month ($200) and some extra money saved up from not having those expensive credit cards anymore ($50), it would only take about four years instead.
However, there are some disadvantages too.
Bad Credit Loans for Debt Consolidation
You’ve done the hard work, and now it’s time to reap the rewards. In addition to getting out of debt, you can save on interest by consolidating your debts into one loan with a lower monthly payment.
And with all this newfound financial freedom, who knows—you might even be able to start saving for that dream vacation you’ve been dreaming about.
Bad credit loans for debt consolidation are a great way of getting back on track financially.
Whether it’s consolidating your credit card debt or taking out a personal loan to pay off other debts (like car loans), these loans allow people with bad credit scores or no credit score an opportunity to improve their situation without having their own application rejected outright.
Because they have no way of showing proof that they will be able to repay their obligations on time every month.
Understanding the Fees & Charges Associated with Bad Credit Debt Consolidation Loans
Fees are a way for the lender to recover some of the costs associated with providing a service. As such, they will vary depending on several factors:
● The type of loan you are applying for – For example, personal loans typically have lower fees than debt consolidation loans.
● The provider you choose – Some lenders charge more than others for their services. This is partly due to competition within the industry, but it’s also because many factors can affect the cost of providing a service (like location).
● The amount you borrow – As with any financial product or service, larger loans tend to carry higher charges than smaller ones.
How to Check Your Credit Score
You can check your credit score for free using one of the three major credit agencies: TransUnion, Equifax, and Experian. Each agency has its system for calculating a person’s score, and each will have different information about you on file.
TransUnion is available online at www.transunion.com.au/credit-report/check-my-credit-score/. You’ll need to enter personal details such as your name, driver’s license number, and postcode before being able to look at your report in full.
You’ll also see how many inquiries have been into your credit history over the past two years (a high level of inquiries could lower your score).
There are fees if an application is declined, but this gives consumers peace of mind around their financial situation before applying for a loan or mortgage – it may be worth paying this upfront if it means getting approved for more favorable interest rates in the future.
How to Apply for a Bad Credit Debt Consolidation Loan in Australia
Applying for a bad credit debt consolidation loan in Australia is fairly simple, but it’s important to know the steps you need to take to ensure you’re making the right decision. The first thing you’ll want to do is gather all of your financial information.
This will include statements from banks or other lenders, income tax forms or pay stubs showing how much money you make each month, and any outstanding bills or loans (including bad credit debt consolidation loans) in your name.
To apply for a bad credit debt consolidation loan in Australia, visit one of our offices and speak with one of our representatives about what type of loan works best for you based on your current financial situation.
After speaking with our representative, they will go over their findings with their manager, who will then let them know if the company approved them and how much money would be available if approved.
Find out if you can benefit from a bad credit debt consolidation loan.
If you’re wondering whether or not a bad credit debt consolidation loan is right for you, you should first find out if you can benefit from one. This will largely depend on whether or not your situation meets these conditions:
● You have high-interest debts that are costing too much in interest payments
● You have multiple loans with different lenders and would like to pay them off at once
● You want to consolidate all of your high-interest debt into one new loan
If you’re looking for a way to consolidate your debts, then a bad credit debt consolidation loan may be the answer.
Not only does this type of loan give you access to lower interest rates than other types of loans, but it will also allow you to pay off existing debts without having to worry about any more interest added.
In addition, if you qualify for one of these loans, there are no prepayment penalties or fees attached, so they can be used whenever needed.