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Inflation has increased living costs in the post-pandemic era, and credit cards charge very high interest rates. High inflation has caused more people to use credit cards to buy food and pay bills, which leads to too much debt. A debt consolidation loan is a great way to lower your monthly costs while getting out of debt.
Most consumers looking to consolidate their debt with the help of Symple Lending and other debt consolidation lenders rightfully wonder if their respective credit ratings might stop them from qualifying for a loan to consolidate their debt. After all, those seeking debt consolidation have more debt than they want, which often is reflected in personal credit ratings.
How Your Credit Rating Might Affect Debt Consolidation
A good credit score certainly makes it more likely to get a debt consolidation loan than someone who has a poor credit score. Being employed and having a reasonable amount of income also helps ensure you can secure a debt consolidation loan. There are lenders, though, that will work with people who have a poor credit rating.
A poor credit rating could happen due to many factors beyond people’s control, such as health problems, a global pandemic, or a recent loss of income. Life happens and could interfere with someone’s plan to pay off existing debt quickly, which many lenders understand. If you have a poor credit score but can show you have a steady income, you stand a good chance of getting a debt consolidation loan that helps improve your financial condition.
How to Find the Right Debt Consolidation Loan
You should check your credit rating before seeking a debt consolidation loan. You can get a free copy of your credit report from Equifax, TransUnion, and Experian. After downloading your copy, you can review each report, challenge any incorrect information, and get rid of debts that aren’t yours.
Fixing any discrepancies in your credit report can improve your score and possibly enable you to qualify for a debt consolidation loan from more lenders. After you know your credit score and have addressed any discrepancies, you can have an experienced debt consolidation agent find lenders who can consolidate your debt.
How the Debt Consolidation Loan Process Works
A debt consolidation loan is an unsecured personal loan, which puts lenders at risk if borrowers don’t repay their loans as agreed. You’ll need to collect information on each lender and the lender’s contact information for each debt that you want to pay off with a debt consolidation loan. Once you have a listing of your debts and the lenders, you can provide that information to the lender to pay off each loan.
You won’t get a check or a deposit when you get a debt consolidation loan. Instead, the lender will pay off each debt and send you a monthly bill for payment. You can pay off the consolidated debt faster and for less money than you would otherwise.