When a loan is to be taken out, this usually happens because money is urgently needed. This can be the case if acquisitions or projects are planned that require additional financial support. Or if there is accumulated debt that should be aggregated and settled with the help of the loan.
If debts are the reason for a loan, it is important to react in good time. If these are ignored or the payment is delayed for a long period of time, it may happen that a debt collection agency joins in to collect the debt. Of course, this makes it extremely difficult to take out a loan because, despite collection, a loan can sometimes fail due to a negative entry in Credit bureau, which the collection company has sold.
What to do with a loan despite debt collection?
Has already reported to collection agencies, this means that it is now really necessary to act promptly. Because the costs incurred by commissioning the company are very high. If you do not act now, the costs for a payment order and an enforcement order will also be added within a very short time. All things that quickly turn a debt of 100 USD into a debt of 400 USD.
In order to be able to take out a loan despite debt collection, it is important to clarify whether the debt collection company has already left its mark on Credit bureau. If this is not the case and the income fits, a normal installment loan can be taken out, which settles the debt and allows repayment with the help of small monthly installments. It is important here that not only the debts that the debt collection agency claims are taken into account, but also all other debts that may have accumulated in the meantime. Otherwise you are quickly faced with the problem that you need financial help and have to look where you can get it.
Hopeless to repay it even with a loan
However, if all debts are recorded in the loan in spite of debt collection, a comprehensive debt settlement can take place and the first step towards a debt-free future has been taken.
However, if there are already negative entries in the Credit bureau or if the income is not sufficient to take out a loan, a second borrower has to be found who can help. Relatives, parents or children or good friends could act as second borrowers. Provided they have a good credit rating and are therefore suitable as a guarantor.
However, if the debt that is collected by the debt collection agency is so high that it is rather hopeless to repay it even with a loan, then the loan should be avoided and the focus should be on advising debtors. Because then it may make more sense to go into bankruptcy than to incur further debts, which in the end only cause more problems for the debtor.