Debt Consolidation Loans for Bad Credit
Trying to manage a number of debts can feel like spinning plates. Keeping on top of an individual sum can be challenging, but with multiple debts, it might not take long for a plate to start to wobble. Luckily, here at Amigo, we offer a way to help bring your debts under control: Debt consolidation loans in the form of a guarantor loan.
What are Debt Consolidation Loans?
A debt consolidation loan is a loan that a borrower uses to settle existing debts, effectively merging any outstanding payments into one single, manageable loan. By taking out a debt consolidation loan, you only need to make one repayment per month, rather than lots of separate payments to different companies on different dates.
- Fast & Flexible Loans for People with Bad Credit
- Borrow up to £10,000 within 24 hours
- Borrow with a guarantor, no credit scores
How does a Debt Consolidation Loan work?
The best debt consolidation loans don’t simply offer more freedom by streamlining your payments; they could actually reduce the rate of interest that you pay and, ultimately, your monthly outgoings. You must carefully consider if an Amigo loan is the right product for you by asking yourself if consolidating your debt into one loan from Amigo lowers your overall interest rate, debt repayable, and monthly payments.
From car finance and credit cards, to store cards and pay monthly deals, the money you owe can soon creep up on you. Being able to consolidate debt into a loan with one monthly payment and a better interest rate can be a huge help when you’re struggling to manage different repayments.
Debt Consolidation Loans for Bad Credit
If you have a low credit score, you’ll understand how difficult it can be to get any type of loan, let alone debt consolidation loans with bad credit. Even if you have ended up with a bad credit score through no real fault of your own (say, if you have no credit history, or an unexpected event made you miss some repayments), you may still find yourself struggling to borrow the money you need to get a debt consolidation loan from a regular high street lender.
However, because of the way we work, you may be able to get a guarantor loan from Amigo to consolidate your debts, even if your credit history is not the best. This is because at Amigo we believe in relationships and trust rather than computer-generated credit scores.
If you have a low credit score, you could still get a loan from Amigo, as long as you’re not currently on an IVA or bankrupt and can afford the repayments. Plus, a guarantor loan used as a debt consolidation loan for bad credit could actually help you to rebuild your credit score and create a positive credit history, providing you make all your payments on time and keep on top of all your other financial commitments.
Guarantor Loans for Debt Consolidation
A guarantor loan is unique because we ask that each borrower provides a guarantor, somebody that agrees to make payments if the borrower does not. Your guarantor must be between 18-75 and have a good credit history. Although they do not have to own their home, they are much more likely to be accepted if they do.
Guarantor loans from Amigo are available for £500-£10,000 over 1-5 years at a representative APR of 49.9% (variable). We are committed to ensuring our loans are affordable to our borrowers and will ask you and your guarantor to undergo an affordability assessment to confirm you will be able to comfortably afford the repayments.
At Amigo, we encourage our customers to think critically about our product to make sure a debt consolidation loan will, in fact, help better their unique financial circumstances by reducing the overall level of debt, interest and monthly payments, not just spreading the debt over a longer period of time.
Debt Consolidation Loan Calculator
You're borrowing £4,000
Over a term of 36 months
Repayment £195.16 per month
Total repayable £7025.76
Interest rate 49.9% (variable)
Representative 49.9% APR (variable)
Credit Card Consolidation
Guarantor loans are also a great option when it comes to credit card debt consolidation.
We know what it’s like; you get swayed by low introductory credit card interest rates, treat yourself to a few things here and there, and suddenly a debt has crept up on you. High interest rates and increasing repayments can quickly become hard to cover. You could use the money from your Amigo loan as a credit card consolidation loan to pay off your outstanding credit card debts and pool them into one sum, which you then repay to a single lender (in this case, Amigo). This way, you can clear your credit card debt and focus on just one payment each month.
Unsecured Debt Consolidation Loans
Unsecured debt consolidation loans are simply debt consolidation loans that aren’t secured against your home. At Amigo, our loans are all unsecured, meaning you and your guarantor do not have to own a property in order to have a loan from Amigo. However, your guarantor is more likely to be accepted if they do own their home.