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If you have low average to bad credit (below 660 credit score) you may still qualify for a debt consolidation loan but the interest rate will be high.
Rates can be as high as 30% in some cases defeating the purpose of a debt consolidation loan.
A debt management plan, or DMP, is offered by credit card debt consolidation companies. What happens in a DMP is your cards will all be closed.
The company you choose to work with will negotiate your interest rate down and set up a repayment plan. You will pay one fixed monthly payment to the consolidation company that is then dispersed to your creditors, minus their fees.
You may be able to qualify for a cash-out refinance with bad credit as low as 620.
There are several credit cards out there that offer a 0% initial interest rate between 12-24 months.
By paying off all of those high interest debts with a single low interest loan you can get out of debt much quicker and cheaper.
Many people choose to consolidate debt because of the high interest rates making it hard to pay down the principal balance.
Getting a consolidation loan with a high rate just doesn’t make much sense.
We asked the experts to find out the best types of loans for consolidating debt for people with poor credit.
RATE SEARCH: Get Cash Using Your Home Equity A debt consolidation loan is a personal loan that pays off multiple debts, such as credit cards and student loans.
A debt consolidation loan may be a great option for you.