Getting Loans With Credit Card Debt: 3 Steps

For many people, securing a loan with credit card debt can be a tough process. However, it can be done if you follow a few steps.

Credit card debt is a widespread "disease" (as it is called in my financial sectors) that has found itself cemented into the lives of many people. The average credit card debt carried by most people estimated to range from $3000 to $8000. Trying to get a personal, auto, or even home mortgage with this kind of debt can be a little difficult. It all comes down to a few factors that will help you get a loan with credit card debt.

Considerations

Before applying for any loan, there are some considerations you need to think about first. The bank is going to look at these factors:

  1. Job. Have you have your job for more than six month? How many jobs have you had in the last couple of years? Is it seasonal or full-time work?
  2. Credit rating. Do you have any current credit rating other than the credit cards? Are there any outstanding loans now? Do you have a good recent history?
  3. Bankruptcy. Have you declared bankruptcy in the last several years?
  4. Family situation. Do you have a large family where you income is stretched already?
  5. Current bills. Are you making timely payments on your current bills?

Preparation

In order to secure a loan with credit card debt you will have to prepare before applying. Make sure all your current credit cards are up to date in the payments. It will do no good for you if you apply for a loan and have outstanding payments on the credit card debt.

Also, if the loan is not for emergency purposes, spend a few months trying to pay off some of the debt. If you can show that over the last six months you have successfully paid down a good portion of the debt, the lender will look favorably on that.

While you are paying off some of the debt, start building a savings account. This might seem like a hard thing to do while you are putting money towards the credit card, even putting in a few dollars a week will help show the bank you are serious about savings, and paying off debt. Plus, if you have some money in a savings account, you can use that to secure a loan.

Start Small

Heading into the bank and asking for a $10,000 home improvement loan might not be a good idea at first. Start small with a $1500 personal loan. There are a couple of different things you can do with this.

  • Make timely payment the length of the loan (usually 18 months)
  • Make several payments then pay off rest of total.

After securing a smaller loan with credit card debt, you will then be able to apply for larger loans.
Loans and credit card debt can be done if you follow a few preparation steps to get it started. Of course, having collateral such as a car for an auto loan, or home for mortgage will also be a factor in securing a loan.


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