Sabres Capital Gets The Job Done Even If You Have Bad Credit
Sabres Capital understands that life happens, and sometimes, debt is inevitable. You can avoid high daily compounding interest and save money for your future and family with a Sabres Capital debt consolidation loan for your unsecured debt.
Based on Sabres Capital customer reviews, this one easy step, you can take control of your finances and save thousands over the course of your loan. That’s money that goes into your pockets – not to your lenders or credit card companies.
Are you drowning in credit card debt and juggling several balances?
If so, debt consolidation loans can streamline your finances and could also reduce the amount of time you remain in debt.
A debt consolidation loan takes the form of a personal loan that rolls all your debts into a single monthly payment.
Although many people have successfully used this strategy to eliminate debt, qualifying for this type of finance if you have bad credit presents many challenges.
That said, it’s certainly not impossible, even though finding a lender to approve your application could be an uphill struggle.
Sabres Capital Advises You To Get Your Credit Report Cleaned Up Before Applying
When you apply for a loan, the lender reviews your FICO credit score and your credit report.
Unsurprisingly, borrowers with the highest credit scores typically qualify for the keenest interest rates. Approval is also more likely as these borrowers are less likely to default.
When you have bad credit, rebuilding a low score takes time.
Nevertheless, you can still take steps to scour your credit report so you’ll improve your eligibility for a debt consolidation loan even if you have bad credit.
Check your credit report
When did you last review your credit report for accuracy?
You can order a copy of your report right here. Each year, you can get one free copy of your report from the 3 main credit bureaus.
Dispute any inaccuracies in this report.
By removing false negatives from the report, you can potentially increase your score. This could provide you with the points you need to secure a debt consolidation loan.
Address any negative records
Contact creditors and ask if they will remove any missed payments. Some lenders will remove a single, isolated late payment as a courtesy gesture. They are not obliged to do this.
If you pay a collections account, this could also ratchet up your chances of approval. This will not always remove the item from your credit report, though.
Many delinquencies remain on your report for up to 7 years, even when marked as paid.
Some consumers manage to negotiate a “pay for delete” arrangement. Here, a collection agency will agree to remove legitimate collections account in return for full repayment. Sadly, this practice is becoming less popular and it’s usually only the smaller agencies that agree to this.
Bring Your Debt-to-Income Ratio Down
Your DTI (debt-to-income) ratio is the percentage of your income that goes toward meeting minimum debt payments.
With a high DTI, you’ll find it difficult to get a loan, even a debt consolidation loan.
By decreasing this ratio – you can do this by earning more or paying down more debt – you might find you qualify.
You could use an unexpected windfall to pay down existing debt.
Also, if you’re expecting a pay increase, wait until the raise kicks in before applying for a debt consolidation loan.
Finding The Best Debt Consolidation with Bad Credit
Choosing the right lender can improve your chances of securing a debt consolidation loan even if you have bad credit.
Many major banks have high minimum credit score requirements as most debt consolidation loans are unsecured and present more risk to the bank.
Online lenders or credit unions offer the best chance of approval.
Some options include:
- First Tech Credit Union
- Navy Federal Credit Union
- OneMain Financial
While a credit union or an online lender may approve your application, you’ll probably pay a higher rate of interest.
Don’t let this put you off applying, though. You’ll still likely be paying a lower interest rate than on your existing debt.
Compare Rates and Fees
You need to shop around lenders and compare rates if you want the best chance of the lowest rates. These vary quite significantly from lender to lender.
Look to secure at least 3 separate quotes.
Don’t overlook the origination fees either. Some lenders add fees which raises the overall cost. Factor these in when comparing rates.
Common Fees for Personal Loans
- Application fees: $25 to $50
- Origination fees: 1% to 6% of loan amount
- Prepayment penalties: 2% to 5% of loan amount
- Late payment fees: $25 to $50 monthly payment or 3% to 5% of that payment
- Returned check fees: $20 to $50
- Payment protection insurance plans: 1% of the loan amount
Repayment terms vary among lenders. As a rule, the longer the term of repayment, the more you’ll pay in interest.
By paying a loan off quicker, you’ll save money over time. Paying the debt down quickly will also result in higher monthly payments, so make sure you can afford these.
Review your budget, then, and choose an appropriate repayment term that won’t leave you struggling.
How To Manage a Debt Consolidation Loan
These loans only work when they are responsibly managed.
Ideally, you will secure a loan large enough to consolidate all your debts under one roof. This might not always be possible, though. If you are forced to choose, target the debts with the highest APRs so you’ll save more on interest charges.
When you have a debt consolidation loan in place, set up an auto-payment to make sure it arrives on time. This will prevent incurring late fees while also establishing a positive history of timely payments which can boost your score.
You also need to be restrained and resist making further charges to your credit card. If you find this too tough, consider physically destroying your cards. Don’t close the accounts as keeping them open will ultimately benefit your credit score.
Debt Consolidation Loan Alternatives
If you don’t qualify for a debt consolidation loan, consider these alternatives.
1) Balance transfer credit card
Even if you can’t secure a debt consolidation loan, your credit score may be good enough to get accepted for a balance transfer of credit card debt.
If so, shift your high-interest balances to the card with a lower rate.
Only do this if you are confident you won’t be tempted to accumulate more debt.
2) Home equity loan or line of credit
You can get a HELOC (home equity line of credit) for up to 80% of the equity in your home.
The interest for these products is likely to be lower than you’re paying.
On the flip side, you’ll be converting unsecured debt into secure debt. Defaulting on HELOCs or home equity loans can trigger foreclosure.
3) Hardship programs
Some lenders offer hardship programs to help you through a rocky financial patch.
If you qualify, some lenders could temporarily lower your interest rates as a courtesy. Others offer forgiveness programs or debt reduction depending on your personal circumstances.
Debt Relief Programs
For those who don’t qualify for debt consolidation loans, there is always the option of a debt relief program.
Some of these companies are less than scrupulous so do your due diligence and make sure you don’t end up creating more problems for yourself.
Rather than using a debt relief program, you could consider working with a certified credit counselor.
These companies are typically non-profits and they’ll provide you with education and free resources. You’ll find out more about proper budgeting, and you’ll learn to better manage credit and debt. Your counselor will work with you to create a personalized solution for paying down debt.
Check first with the Attorney General’s office in your state to make certain there are no complaints against the provider you’re considering.
If money is tight, eliminating debt can be challenging.
With a debt consolidation loan, you’ll simplify repayment and potentially get rid of your debt quicker while saving money at the same time.
If you have bad credit, ensure you choose the right lender and take steps to improve your credit score, too.
Penelope Piza is versatile and a gifted writer. She joined The Elgin Daily a few months ago and has helped our readership grow a lot. She always connects with the readers and produces noteworthy news pieces. She is also working on her first novel, which she plans to publish by the end of this year.