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Your Bad Credit Debt Consolidation Loan Options

Consolidation loan options for people with not so good credit

If you have bad credit, it can prove to be a huge stumbling block when you're trying to get a debt consolidation loan in Orange County, California. However, it needn't be insurmountable. Big banks likely won't consider you, because they'll see you as a bad risk, but there can be other ways for you to borrow money. Let's talk about the pros and cons of a few.

Home Equity Credit Line

If you have equity in your home, you might be able to get a tax-deductible, low-interest line of credit. It's an inexpensive way of raising money, and your credit score won't have to be all that good. Of course, if you don't make your payments, you're putting your home in jeopardy. If you're considering a home equity credit line, make sure that you get information from a variety of institutions in Orange County, California before you make a commitment.

Credit Union

Credit Unions, unlike banks, are nonprofit organizations. They pass along their profits to their members in the form of easier financing options with lower rates; even debt consolidation loans for bad credit. Again, get information and comparison shop, but if your credit is spotty, chances are you'll have better luck getting debt consolidation loans for bad credit from a credit union than you will with a chartered bank in Orange County, California.

Bank of Mom and Dad

Sure, it can be humiliating, but if you need a debt consolidation loan to cover your credit card debt, you might be able to get one from a family member. Of course you should follow the same procedures as you would with any other lender, offering collateral if you can, and setting up a proper payment schedule. Family might not expect you to pay interest, or might give you a low rate. Either way, the terms should be set out in writing. It goes without saying, of course, that this should be a last resort. Bad feelings could develop if you don't hold up your end of the agreement, and it would be a sad state of affairs indeed if you were no longer welcome at Thanksgiving dinner.

Peer to Peer Loan

What would we do without the Internet in Orange County, California? Well, for one thing, we wouldn't be able to get peer to peer (P2P) loans. The way it works is, borrowers post requesting a debt consolidation loan, stating how much they want, and the purpose of the loan. Lenders look at the listings, consider the applicants who meet their criteria, do a credit check, and decide whether or not to offer debt consolidation loans for bad credit. Your credit score is a factor, but a P2P lender might be a little more sympathetic to your particular situation than a bank, which is only going to look at your credit score.

Find a Co-Signer

If you can't get debt consolidation loans for bad credit from a bank, your family has turned you down, and you can't make the P2P thing work, you could try finding someone who knows you and your situation, and trusts you to repay the loan. Perhaps an employer? Your co-signer will have to have good credit. If you don't repay the loan, or you fall behind on your payments, your co-signer will be on the hook for the full amount, and both your credit reports will be adversely affected.

Last Resort

If none of the above works for you, then all you can do, as a last resort, is try to raise your credit score. That means paying your bills on time, and not overextending yourself on short-term financing and credit cards. It can take time to rebuild your credit. You can check your credit report at no cost by visiting annualcreditreport.com.