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Digital News Report – Various banks offer debt consolidation loans even for people with bad credit. The customer’s credit score will affect the final interest rate but the loans are still available.
Debt consolidation loans are used to combine multiple obligations. They can be secured and unsecured. Unsecured loans may require less paperwork but they also carry a higher interest rate.
Borrowers with bad credit scores will also pay more in interest. There are some things you can do to minimize this problem. The Federal Reserve recommends customers check their credit for mistakes before they apply for a loan.
Also, some banks will give their customers a lower rate than non-customers. Depositing money in the bank you borrow from may help lower your rate.
First Command Bank is offering unsecured debt consolidation loans starting at 10.0% APR. “Your actual rate will be based on your credit worthiness, term, loan amount, and available discounts,” the bank said in a statement.
“Discounts (are) available for customers with First Command Financial Planning investment and/or life insurance products (3.50% – 4.50% discount) and for customers with automatic electronic deposit to a FCB checking or savings account (0.50% discount).”
The bank is charging a starting rate of 6.25 on secured loans. First Command Bank also has a fully CD-secured personal loan. The loans can be used to refinance student loans and pay-off credit card debt.
There are also “partially secured” loans available. First Command Bank also offers partially secured loans. The interest rate will be based on the loan-to-value-ratio.
By: Tina Brown