Not yet registered? Create a OverBlog!

Create my blog

How to refinance bad credit

You have poor credit because you have defaulted on your credit obligations during the last seven years. Peer-to-peer lenders will only allow you to borrow money if you have good credit. If you want to refinance with bad credit, you will need to be a homeowner. Provided that you have sufficient equity in your property, you can get a bad credit home loan.

How to refinance with bad credit

Unsecured loans not an option
If you want to consolidate your credit obligations, you will need to be a homeowner if you have a bad credit history. If you do not have any collateral to secure the loan, you will have to pay a usury rate of interest. Most people find that their credit has deteriorated since they experienced problems, so consolidating debt with a more costly arrangement is inadvisable. Refinance home with bad credit
Lenders want to minimise the risk of bad debt appearing on their balance sheets and home equity is their way of achieving that objective. Refinance rates will be more favorable if you have a sufficient amount of equity in your property. Home equity is calculated by subtracting your mortgage and secured loans from the value of your house. Loan refinance and affordability
The provision of security means that you will pay low interest on the loan. However, you will only be approved if you can demonstrate that the repayments are affordable to you. Your income-to-debt ratio will need to be below 36%. The objective is to ensure that you have sufficient disposable income to make the repayments and do not lose your home.

Alternatives to refinancing bad credit

Debt management plans
If you are a tenant, refinancing a home is not an option. Even if it is, do you really want to put your home at risk? A debt management program does not involve taking out another loan, it involves changing the terms of your existing agreements. You will make a single, affordable repayment each month until all of your credit card debt and unsecured loans have been paid off. Debt settlement programs
After a series of negotiations with your creditors, you may be able to eliminate up to 50% of your unsecured debt. Like mortgage refinance, you will then make a series of monthly payments until the remaining debt is cleared. You already have a poor credit rating, so getting your personal finances back under control is your number one priority.

Same category articles Banking

A guide to savings and investments

A guide to savings and investments

This article describes what individuals need to do before they can venture into the field of savings and investments. These are two deeply related concepts and the manner in which a person handles one always affects the other. The guides are flexible enough to fit people of all economies across the world, no matter their professions.
How to get credit cards for people with poor credit

How to get credit cards for people with poor credit

If you have failed to comply with the terms and conditions of any of your credit agreements during the last six years, this information will have been passed to credit reference agencies. This means that your days of getting a low credit card rate are over for the foreseeable future. However, you may be able to get an adverse credit card from a specialist poor credit issuer.
What is not-for-profit accounting?

What is not-for-profit accounting?

Not-for-profit accounting is an area of accounting that is vital to the success and financial stability of charity and non-profit organisations such as charities, non-governmental organisations, churches, youth groups, community action groups and local chambers of commerce. This article looks at what not-for-profit accounting is and how it differs from profit organisation accounting.
All about: Scotwest Credit Union

All about: Scotwest Credit Union

A credit union is a type of cooperative, which is basically an organisation or association made up of members that offer lending and saving services for each other. Members of cooperatives like credit unions always have a common characteristic. In the case of the Scotwest Credit Union, members are all residing in the western region of Scotland.