Having bad credit is unfortunate and unavoidable, especially during the global economic crisis. In fact, it is challenging to search for a debt consolidation loan when you have bad credit. However, finding a good lender is not impossible if you make a lot of effort to search for one. In the United States, there are many lenders who specialize in providing financial assistance to people with bad credit. However, among these lenders, some are scams.

In order to get a genuine loan provider, it is recommended to follow the following tips:

# Tip No. 1 – Look for references

For people with low credit scores, they are advised not to waste time to apply for a loan from traditional financial institutions. They are encouraged to get recommendations from their banks, legal advisers or someone they know. You should look for reputable debt consolidators so that you can minimize your financial risk.

# Tip No. 2 – Check the credentials of the lender

You should be very careful when evaluating the background of the potential lender. It is recommended to contact the Better Business Bureau to verify the credentials and reputation of the loan provider. You need to find out if there is any record of consumer complaint against the company. If there are many complaints reported, it is recommended that you stay away from the loan provider. In the United States, there are some states that prohibit the operation of commercial debt consolidators. Therefore, you are reminded to carefully check your state’s licensing requirements.

# Tip No. 3 – Find out about the services provided by the lender

To save your cost, it is always better for you to look for non-profit debt consolidation loan providers. As a consumer, you are reminded to find out the details of the services provided by the lender. In general, most lenders provide free consultations to their clients. They also help their clients to come up with a suitable budget plan based on the financial position of the individual.

# Tip No. 4 – Get a written proposal from the lender

Before accepting the loan, it is recommended to obtain a formal proposal from the lender. The proposal should include the details related to the interest rate, the length of the payment, the amount of the monthly payment and other terms related to the guarantee. Please read the proposal carefully before signing the loan contract.

You should keep the above 4 tips in mind when looking for a loan. It is essential to carefully evaluate potential lenders because we do not want to worsen our credit.