How can I get a debt consolidation loan with bad credit?

R

RolandWyzard

New Member
I have around $33,000 in debt. I'm current on all payments, but my credit isn't good because of my debt-to-income ratio. I want to consolidate everything into one payment, but I can't get loan approval due to my credit score. Paying it wouldn't be a problem. I'm not interested in those programs where you stop paying your creditors and pay them instead. Has anyone ever gotten approved for a standard consolidation loan without good credit? Should I try a credit union?
 
You might wanna chip away at some of those smaller balances, maybe even knock one out entirely. Get that overall debt ratio down and then you could have a real shot.

Credit unions can be a bit stricter sometimes.

Maybe try going to your own bank and having a chat. They can take a look and tell you exactly what you need to get to so they can help you out.
 
Start aggressively paying down smaller debts now. This action boosted my score significantly. I could likely secure a decent loan today, but I choose to continue paying. Expect this process to take about two years for scores to fully recover.
 
I was up to date with my payments, but I just couldn’t keep up with the minimums anymore it became too overwhelming for me. I decided to start a debt settlement program, but I’ve only just begun, and honestly, it already feels so difficult for me.
 
I work at a credit union. We review consolidation loans. A key factor is debt to income ratio, especially unsecured debt to income. Our policy: we lend a percentage of your AGI in unsecured debt credit cards, personal loans, lines of credit. The percentage depends on your credit score. Higher score, higher percentage.

Example: annual gross income $60,000, credit score 680. We approve up to 30% $18,000 in unsecured debt. Score of 600 lowers it to 18% $10,800.

Your total DTI must also meet guidelines. Ours requires 45% or lower.

My advice: ask your bank about its policy. Pay down debt to that amount. Consider using collateral if available collateralized loans often have lower rates.

A positive: as you pay down debt, your csore rises. That means a lower rate when you qualify.
 
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