Debt consolidation! Know about your saviour in bad credit situation
Mess happens, and when it happens, it is natural to feel desperate to find an escape window. Bad credit situation is known to spread the chaos in financial lives. However, in some or other ways, we are the only responsible person for the conditions we bear. Oh yes, sometimes circumstances too play the destructive role.
The upside-down of the UK economy due to Brexit buzz that started in 2016 [now solved], created many uncertainties. From pay squeeze to the cost of living crisis, everything affected not only the Britons but also the natives of the whole of Europe.
Whatever is the reason for your bad credit, it can be worse if you have multiple obligations. There are many instalments to pay and that too in different interest rates; it is like doing a financial suicide. Also, it is very immature to keep making hefty repayments despite the availability of the solution.
Debt consolidation is the anchor tool that can pull you out from the poor credit situation. It gathers all your debts and turns into one loan, and in the place of multiple repayments, you pay only one instalment.
When you can pay the instalments on time, your credit rating naturally gets a rise. Debt consolidation can help you do that, but it is then necessary to know about it in detail.
What are the qualifying formalities?
- Yes, these are the first gatekeepers that you need to cross. Do not worry. Nothing is complicated here. Few basic requirements and it is fine to go to the further stage.
- The income-outgoing ratio should not be lower than 30:70. It means, at the maximum if your income 30 per cent and the 70 per cent is of expenses that are bearable for the lender. Poorer situation than this can make the lending company deny you.
- Make sure you have not applied for any new loan or and financial product. With already so many debts, it can be suicidal to apply for more. The loan companies, especially the digital lending companies, are flexible, but they too have their limits on the risk part. The debt consolidation loans for bad credit in the UK is to gather the scattered finances, why to make the situation worse by applying for any new credit card, loans, etc.
- The presence of an additional income is a strong factor to qualify for the loan. However, it is optional. If your debt-to-income ratio is abysmal like 20% income 80% expenses, then additional income may become a saviour.
What is the solution for those with a previous rejection?
If you have been rejected in your application for debt consolidation, then it is not wrong to try again. The need is to be on your toes this time. With a rejection on your credit report, the search footprint plays a destructive role.
Try the following ways to get approved despite a previous denial –
First work on some ‘credit score improvement’ tips
Before you apply for the next time, it is better to gain at least a bit rise in your rating.
- Pay the bills on time
- Pay at the right time to let no late fee spoil your payment history again
- Try to pay off a small debt completely
The above steps can help the lender get convinced on your repayment capacity. In that case, getting approval becomes quite easy.
Choose debt consolidation loan company on the following parameters
Not only the lenders, you too need to crosscheck the debt consolidation finance companies on certain aspects. They are –
- What is the tenure of the new loan?
- What is the interest rate? Is it considerably lower that the total rate of interest you were paying previously through multiple debts?
- Is there are an upfront fee? If yes, then you are not talking to a genuine lender. Search more for the established names like Huge Loan Lender and many others.
The Consolidated conclusion is….
All the above situations and conditions can take you to the safe zone where financial life is at peace.
There is no money mess, no mounting or pending debts, no clutter of instalments. With the right type of solution in your knowledge, it is easier to trim off the extra expenses and debts. Apply now and have a safe transformation from bad credit situation to good or at least fair credit rating.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.
