Funny thing about credit … if you have good credit, people want to loan you money. Lenders absolutely BEG you to borrow from them, but if you have bad credit, nobody seems to want to loan you any money.
However, all is not lost. Those who have less than perfect credit can still borrow money. They can make what is called a "bad credit debt consolidation loan."
One theory behind lenders being willing to loan money to those with this is that those who have bad credit are putting forth a good-faith effort to improve their situation, and the lenders are nice folks who want to help.
The other theory behind lenders being willing to loan money to those with this type of money is … well … pure greed. Those with this are
going to be charged a higher interest rate on a debt consolidation loan than those who have good credit. A higher interest rate means that the lender is making more money.
It does not matter whether the reasoning behind making a bad credit debt consolidation loan is because lenders are nice folks who want to help or greedy money grubbers, the point is that there is money available for those with bad credit to borrow that can help them get out from under crushing debt.
Lenders do take into consideration the reasons behind a bad rating as well as the length of time that a potential borrower has had the bad rating. There are situations in which people have been paying their bills on time each month and then suddenly have an unexpected problem, can not pay their bills, and find their credit rating goes down the toilet. If this happens, the sooner a bad credit debt consolidation loan is applied for, the lower interest rate will be.