An individual’s credit history is affected by many factors which could be classified into controllable and uncontrollable. A person has the option to pay his or her account on time if they have the money or can source the money when the payment is due. It is natural when someone gets laid off due to the economic crisis which forced the employer to shut down the business. The subsequent effects on a person’s finances that would prevent him or her from paying credit card bills on time are beyond one’s control. In both situations where people fail to pay their bills, their credit report would reflect their accounts. With such an adverse report, a credit score would be below average. If you are this kind of borrower, don’t lose hope as you can still receive a loan but at subprime rates. You will be granted debt consolidation with less than perfect credit if you apply to consolidate your loans. The interest rate that they will give you would be not much desirable for a below average credit standing.

Check Your Credit Score

Whenever you are planning to negotiate a loan, you should review your credit score first. Check your payments and negotiate them with your creditor. It is possible that there have been some errors committed relayed to the credit bureau handling your account. A credit score has the possibility of becoming perfect or even above average if you can have it rectified. Imagine the difference in the interest rate that accompanies a high credit score and the high interest rates charged to borrowers with a low credit score. If your loan is big and the terms are long, you can save a lot of money if you can produce a corrected credit score in your favor.

Shop Around and Negotiate

Spend some time searching for the right loan and lender that will fit your financial request. If you feel you need to consolidate your loans, find debt consolidation loans with less than perfect credit options that will suit you. Request and negotiate three debt consolidators and compare their proposals. Speak out about your needs and negotiate the best interest and terms. Don’t hesitate to ask questions especially on the mortgage conditions. Your collateral is always in danger of getting foreclosed in case you fail to pay on time. Read the fine print provisions and be sure to understand every term. If you feel you are not up to the task, hire a lawyer to interpret them for you. You are bound by the loan agreement once you leave your signature on that document.

Lenders will tempt you with seemingly realistic figures of lower monthly installments. It is best if you make your own computation and study it closely. Compare the alleged benefits of consolidating your loans with those of paying your loans one by one giving priority to interest and penalties. You may find it more beneficial if you try to do your best in dealing with your present loans through strict budgeting.