If you have a lot of high interest debt, one of the best things you can do in order to pay it off faster is debt consolidation. Unfortunately, those with a lot of debt often do not have the best of credit scores and this can make it harder for them to get a debt consolidation loan. If you have equity in your home however, you’ve still got some great options that we will discuss in this article.
What debt consolidation options are available for those with low credit scores?
At AKAL Mortgages, we can offer you a number of debt consolidation options. These include:
- Mortgage refinancing – this option will require you to break your first mortgage and get a new one. Your debt will be included in the new mortgage, so your mortgage (and new mortgage payment) will be higher but you won’t have all your other debt payments to make anymore.
- Second mortgage – with this option you won’t have to break your first mortgage. You simply borrow from the equity in your home in order to pay off your other debts. The interest rate will likely be a little higher than that of mortgage refinancing but you won’t have to worry about a financial penalty for breaking your first mortgage.
- Home equity line of credit – this is a revolving line of credit that works in a similar way to a credit card but it is secured with the equity in your home.
Can I really get a debt consolidation loan with a low credit score?
Yes! Although you will likely have to pay a higher interest rate on your debt consolidation loan than you would have if you had a better credit score, it is still possible to get a debt consolidation loan. At AKAL Mortgages, we work with a variety of lenders and we can help you find the one that is right for you.
Can a debt consolidation loan improve my credit score?
Yes! If you have a lot of debt and a poor credit score, one of the most important things you can do is make sure that you keep up with your payments and get out of debt quickly. A debt consolidation loan can help you do that.
Not only can it help you get out of debt more quickly by lowering your interest rate, but because you will only have one debt to pay off, it lessens the likelihood that you will forget a payment.
Contact AKAL Mortgages today
Don’t let a low credit score stop you from getting a debt consolidation loan. Contact AKAL Mortgages today to speak with one of our brokers.
When we say YES! We stand behind our promise.