Debt Settlement Online & Debt Consolidation Help & Tips
Finance & Loans

How a loan can help repair bad credit

November 28, 2011 by · Leave a Comment 

Being in debt is not a good situation to be in. But there are instances where getting another loan could be the way to get out of the situation and begin building your credit score again. This can be done through debt consolidation and credit restructuring.

Debt consolidation

You combine all your debt and get another loan from a third party and pay off all the debts and have only one repayment to make. You can also negotiate with the creditors and settle to pay a lesser amount or have the interest waived off since you are repaying in one payment.

Consolidation can also repair your credit rating since all the debts you settled will be reflected as “paid” which will improve the score and also making the consolidation loan repayments on time every month will add further to your credit rating.

One thing you need to keep in mind is that this kind of loan will be costly since you are getting the loan as a person with bad credit and a higher rate of interest will be charged from you but on the positive side the rate will be lesser than the interest charged on your credit card debt.

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