(Untitled)

[misterdoodyhead]

If I have bad credit, what are my options for taking out a loan to pay off debts? Idealistically, I'm going for $7000.

Thanks in advance.

Comments

[swingangel]

not so good, and if you can it will be at a very bad interest rate. Debt consolidationloans are not freely given by banks because they are taking on debt from other institutions and if you are already struggling they don't want to struggle with you, so to speak.

[misterdoodyhead]

I can tolerate a bad interest rate - I'll take that over being homeless.

[swingangel]

Well, it's worth a shot. I'm a loan officer, so when you say bad credit obviously I assume the worst. I'd start with places like Household and American General, although really, depending on your situation, CCCS might be better for you.

[_perfectionist_]

does CCCS have credit requirements that you have to meet in order for them to work with you? 'cause I am fixing years of terrible awful financial mistakes on my part and my credit is in the absolute toilet, and CCCS was sort of were I hoped to head. ugh mannnn.

[lozoodle]

I considered doing that to pay off a $7,500 credit card (which has been at its limited for years, but I've just been making minimum repayments and ignoring it, even though I badly wanted to get rid of it) - I wanted a lower interest rate. In the end I decided against it and just focussed on putting chunks onto my card, and as I did, I reduced the credit limit on it so there was no possibility for me to withdraw the money again. That was in March. It's now down to $5,500 so I'm feeling quite accomplished :)

What sort of debts do you have? If they are credit card type debts, I would pay off as much as you can afford in each hit, and then reduce the credit limit each time. At least then it's paid and out of the way and there is no possibility of using the card.

[lozoodle]

True. I think that depends on where you are though. In Australia your credit score is made on applications made (whether or not they approved - even applying for a loan and getting knocked back gets added to it) and having a higher limit can actually hurt you.

When we bought our house last year we ended up having to pay a lot more mortgage insurance because I had such a high credit limit. It was taken into account when they decided on our affordability, and that together with the fact my partner has another property meant we had a lower affordability in there eyes and had to pay $12,000 mortgage insurance up front hehe.

[fiona64]

There are debt consolidation loans available from a variety of lendors; really shop around if you decide to go that route, as interest rates vary. You may wish to consider working through a Consumer Credit Counselors-type group; they deal with the creditors to freeze the amount of debt due (i.e., no additional interest). You send a money order to the credit counselor group on a monthly basis and the funds are disbursed by them. They also notify the credit reporting bureaus when you have completed the program.

[sus7]

I'm thinking not so great. I don't have bad credit, but I don't have optimal credit either, and I was refused for all attempts I made to get $1700 for tuition.

[gracedescending]

i'd say minimal. check out prosper.com though.

[cmarie14]

I was going to say prosper.com as well. But be a good borrower and please pay it back - if you get money from prosper it's coming out of other people's pockets who decided to give you a chance, not a bank (not that you shouldn't pay back a bank loan.)

[cmarie14]

I'm sorry, I just reread that and it sounded patronizing. I didn't mean that you intended to not pay it back, I was just trying to point out that if something happened and you couldn't it would directly affect the people that had invested in you, where a bank would be affected the other way (and possibly indirectly affecting it's other borrowers, too.)

[carmen]

I was going to suggest Prosper as well.