When you have bad credit and debts, the loan market thinks you can't be trusted. How can you trust someone who has bad credit and is going to another place? This is what lenders have to say about people with bad credit. Still, there is a different school of thought that says people should be given a second chance. They think that if these people can't get loans, they will be forced to file for bankruptcy or get a County Court Judgement. And that does no good.
Lenders have taken the other school's point of view, but they are being careful about it. This leads to a bad debt consolidation loan. Borrowers with bad credit can get money from a bad debt consolidation loan to help pay off their debts. With these loans, it's easy to get rid of large amounts of debt that would otherwise seem hard to pay off. And while you have to think about whether or not your income is enough to pay off your debts, bad debt consolidation loans give you access to the big bank accounts of the lending agencies.
But lenders haven't completely let their guard down against people with bad credit. There are still some checks they do to make sure the borrower doesn't go back to his old ways. One of these checks is how strict the terms are for bad debt consolidation loans. You will have to pay more in interest. If you're hoping to get more money through these loans, you're out of luck. Also, it will take much less time to pay back, about 10 years.
Do you think this is unfair? Look at what's going on with you. Then, compare it to someone you know who has been given good credit. After seeing this, you would definitely lower your expectations. The risk that comes with lending has a big effect on the terms that a borrower gets. Lending agencies will give the borrower a credit score so they can figure out how risky they are. People with a credit score under 600 are thought to be bad creditors, but they can still get loans if they need them.
But it still needs to be decided what changes in terms are okay and what are too much for the lender. It has been seen that lenders charge bad credit borrowers a lot more than what is normal and reasonable. This is because big banks don't help, and small lending agencies start making money off of the borrowers' lack of knowledge and need. This can be avoided by doing good research on the market for bad debt consolidation loans and being patient.
