Things To Know About Consolidation Loans For Bad Credit In Victoria

One of the common mistakes about debt is that people with low or bad credit scores only have the option to file for bankruptcy. This myth stops many people in the Victoria area from considering a debt consolidation loan. They believe their low credit score will prevent them from being approved for the loan.

The truth is that our team at 4 Pillars Debt Consultants can help individuals throughout Victoria to understand the options with consolidation loans for bad credit. Not all banks, credit unions, and financial institutes offer these types of loans. However, they are available, and they may be the ideal solution.

Not All Low Credit is Bad Credit

Generally, traditional types of lenders across the country consider a bad credit score to be anything reported by the credit bureaus as 574 or less, but this does vary. In Canada, the range of credit scores is 300 to 900. For reference, an excellent credit score is 760-900, and the average credit score is about 650.

Bad credit is related to missed payments, high debt to income ratio, late and partial payments, unpaid balances on debt, and perhaps even legal judgments against the consumer by creditors.

In some cases, people with thin credit or no credit have a low credit score. Thin or no credit simply means the individual has not shown an ability to manage debt, which is a concern for a lender.

What to Consider

Applying for consolidation loans for bad credit is a practical strategy for many. Providing additional documentation to a lender offering consolidation loans for bad credit may be all that is required.

In some situations, the lender may ask for collateral, while others may approve the loan with a higher interest rate than a traditional lender. Helping you understand the pros and cons of these options is what we do.

To determine if a bad debt consolidation loan is the right solution, reach out to our debt consultants for a free consultation.