Bad Credit Consolidation Loans

Bad credit consolidation loans are offered to those who have struggled with their credit. The banks appetite for lending to those who have credit issues has lessened since the recession.

In 2005 many banks would finance a consumer who previously filed for bankruptcy, provided they had two years of re-established credit and a minimum credit score of 680. In the past a credit score in the 500’s was considered a bad credit score, however in today’s economic climate, a bank looks at a consumer with a 680 credit score as though they are high risk.

Banks are no longer obliged to give second chances. Banks such as Scotia Bank will not lend to a previous bankrupt at all, whereas some other banks will but only with many, many years of re-established credit.

Those who held on to their homes through the recession may have paid another price, namely their credit. Many hard working Canadians have left this recession loaded with debt and in a position where they have had no choice but to seek some form of debt relief.

No doubt your options will be limited if you have bad credit and need a consolidation loan. Some finance companies like Wells Fargo and Citi Financial, offer high interest consolidation loans (25%-30%) but even they will want to see a good credit score and at least two years of re-established credit.

If you own your home and you need a bad credit consolidation loan or are half way through a consumer proposal you may be able to leverage your home equity to consolidate your debt or payoff your consumer proposal.

There are many lenders who do not have a “retail” presence; you can access these lenders through a mortgage broker. Trust companies will extend equity financing to a customer who has struggled with credit based on the equity in their home. In addition so will some credit unions and private mortgage investment firms. Finally there are private lenders who will offer financing that major financial institutions won’t. Bottom line, a knowledgeable and well-connected mortgage broker is your best course of action.

You can use your home equity by refinancing your first mortgage or by taking out a second mortgage to consolidate your debt. This is also the most affordable way to obtain a bad credit consolidation loan because the interest is much cheaper than the unsecured loans offered by the high interest finance companies.

While customers who are looking for bad credit consolidation loans are finding at the retail level that there are fewer options out there, there are still many lenders who are willing to work with a consumer who has credit issues. The key is that you are taking positive steps towards rebuilding new and positive credit. For more information about bad credit consolidation loans please visit http://www.gtamortgagematters.com/