Debt Consolidation Loan with Defaults

Debt Consolidation Loan with defaults is not uncommon. Owing lots of money to different lenders can be extremely scary, especially if you are beginning to default on your loans and financial obligations. Defaulting on loans (loan defaults) can have serious consequences on your credit score and can lead to those struggling being subjected to extremely embarrassing and costly debt collection practices. It is possible to save yourself the stress and negative consequences that defaulting on loans can bring by taking out a debt consolidation loan. Read on to find out how putting all of your debts into one place can help, with a debt consolidation loan, even with defaults.

Credit score

Defaulting on your financial commitments can have disastrous consequences for your credit score. Any time that a financial institution is forced to close your account because you have missed several payments, they are obligated to inform credit reference agencies who will record it on your file. This report will stay on your file for six years from the date that the default occurred and will be visible to all, should they run a credit check on you. This can mean that you will struggle to secure financial products such as mortgages or loans. Paying off your debt with a debt consolidation loan can save you the heartache involved as well as help you maintain your credit score at a healthy level.

Debt collection

Defaulting on your loans also leaves you open to unpleasant experiences when it comes to debt collection. When you default on unsecured debts, you might well be subjected to doorstep collectors as the institution tries to recover the money that you owe to them. These collectors don’t actually have any legal powers but having them visit you can be disconcerting and can also cause embarrassment. The people you owe money to could even take you to court if they apply for a County Court Judgment (CCJ). This will not only look incredibly bad on your credit file but will force you to repay the money at a rate decided by the court. The worse situation can occur if the debt is secured against your home. In this situation, you could find that your home will be repossessed. A debt consolidation loan could give you the breathing space you need to pay off your debt without having to worry about these terrible consequences.

Debt Consolidations Loans can be the answer for those who are facing defaults. They can help you escape the situation quickly and can often lower your monthly repayments, giving you the chance to actually meet your obligations. They also allow you to put all of your debts in one place. Making one payment is much easier than juggling lots of different creditors.

Contact us today

We’d love to help you move towards a debt-free future. Our friendly team will offer no-obligation advice and answer any questions you might have about joint debt consolidation loans – just call us today.

Why debt consolidation?

  • Improve your monthly budget
    A debt consolidation loan will enable you to group all your existing borrowing and the monthly repayments are easier to manage.
  • Reduced overall repayments
    A debt consolidation loan could even save you money each month if the interest rate is less than the combined total interest of the previous loans.
  • Improved credit rating
    The simplicity of repaying a debt consolidation loan means that you are more likely to repay the debt on time every month. This will prove you to be a responsible borrower, which will have a positive effect on your credit score.