Bad Credit Loans – Help and Advice: Adverse Credit – Borrowing Money & Resolving Debt Problems

It used to be easy to perform credit consolidation when a good credit score existed but, as soon as financial problems and bad credit raised their ugly head, all the banks that used to say yes started to say no. Having credit card debt and several adverse credit loans are now proving difficult to manage.

Bad Credit – The Product of Changing Life Circumstances

It is possible to borrow money and perform credit consolidation even if poor credit exists. Financial problems are often caused by borrowing money during times of prosperity only to later experience debt problems when a life situation changes for the worse. With credit card debt attracting such a usury rate of APR, it is sensible to perform credit consolidation.

Credit Consolidation with Bad Credit Secured Loans

Borrowing money with bad credit can be achieved, but it costs more than the loans of the past. There are only two ways someone with bad credit is going to be able to get an adverse credit loan.

  1. Paying a usury rate of interest on an unsecured loan is safer, but more costly. This rate is usually upwards of 50% due to underwriting the risk associated with debt problems and potential loan default.
  2. Apply for an adverse credit secured loan. Providing the lender with additional security means that a lower rate of APR is charged for borrowing money. It also means that the family home is at risk if payments aren’t made.

Unlawful Loan Agreements

Before performing credit consolidation it is sensible to see if financial problems can be solved by checking see if there is an unlawful loan agreement. Approximately 60% of loan agreements signed up to before 6th April 2007 won’t stand up in a court of law and can be written off. This would mean that the loan is written off.

Debt Solutions

If loans and credit card debt have become too much to handle, finding the right debt solution is the way to proceed. It is possible to consolidate all debts under one roof in a Debt Management Plan. Alternatively, if serious debts exist an Individual Voluntary Arrangement could help someone with financial problems become completely debt free within 60 months.

There are a number of ways to deal with debt problems, but the debt solution must be tailored to the unique set of personal circumstances. It is advisable to consult a qualified money counsellor before deciding which debt solution to proceed with.