Trying to gain control over debt is important, both for financial stability and peace of mind. For many Connecticut residents, debt management becomes more challenging once their credit scores drop. Fortunately, there are still a number of tactics that can be used to gain control over debt, regardless of one’s credit scores.
One option is to secure a co-signed loan to pay off other creditors. Some lenders will issue a loan to a borrower with bad credit if someone with a better credit standing agrees to co-sign. This makes it easier to qualify for a loan, and can yield a better interest rate. On the downside, if the borrower fails to repay the loan, the co-signor is left on the hook for the balance.
Another option is a secured loan. These loans require something of value to secure the loan, such as a vehicle or other expensive item. If the borrower does not repay the loan as agreed, the lender has the right to seize the item(s) held as collateral. This is only a good option if the borrower is certain that he or she will be able to repay the loan under the given terms.
For many in Connecticut, these types of arrangements can help cover expenses until financial circumstances improve. Co-signed or secured loans do come with a high level of risk, however. For those who have serious debt issues or no way to bring in additional income, personal bankruptcy may be a better option than any of the debt management tips provided above.
Source: sfgate.com, “Bad Credit? You Still Have Tools to Whittle Down Debt“, Amrita Jayakumar, Jan. 4, 2018