Bad Credit Loans Becoming Harder To Obtain For People In Ireland

At Myvesta Ireland we are already helping many people who have turned to as as they are made aware that getting a bad debt consolidation loan is becoming much more difficult in the light of the international credit crunch. This, for many people, is really not such a bad thing as bad debt loans (or adverse lending as it is formally referred to) are usually not the best way to deal with a multiple debt situation.

Most people realise that you can't borrow your way out of a bad debt problem however ironically this is exactly what people with debt problems automatically seem to want to do. This course of action is unfortunate as debt problems can only be dealt with effectively if a person understands clearly what the position of their actual financial situation is.

One of the key drivers for people experiencing debt issues and wishing to take out a bad debt loan is to avoid impacting on their credit rating with the Irish Credit Bureau (ICB) However, if you stop and think about this seemingly sensible judgment in the cold light of day a persons desire to maintain a good credit rating at all costs can be a very dangerous course of action. If a persons financial situation is such that credit and debt commitments are simply unsustainable in terms of maintaining contractual debt repayments on loans and credit cards then that is the time to stop any further lending in the form of consolidation loans or other credit facilities.

Taking on a credit consolidation loan simply to wrap up other bad debts into a single loan payment may sound like an ideal debt management solution but the reality of many loans taken out to deal with a bad credit situation is that the new repayment commitment is also simply not practically affordable.

I think the comparison of 'rearranging the deck chairs on the Titanic' is perhaps a bit too strong, but for many people trying to deal with a multiple unsecured debt situation and turning to loan consolidation companies it serves to illustrate the point I feel.

At Myvesta we often remind people that turn to us for debt help that credit ratings are as a tool for lenders and a persons credit score does not often have much correlation to what is the best debt advice and subsequent course of action that a person should take to address their individual financial situation. If a person has overwhelming debts then consolidation loans are usually not the answer to that persons debt problems if the underlying issue is basic affordability.

In the UK, which has an older and more established credit market, debt advisors such as Myvesta deal with many thousands of people who had opted to go down the bad credit consolidation loan route a year or so ago. Unfortunately for many of these individuals the decision served only to increase the amount of total debt outstanding and delay the often inevitable decision to draw a line in the sand by dealing with the debt problem from the simple viewpoint of actual affordability. I very much fear that we will be helping many more Irish consumers that have over extended themselves via credit consolidation loans when realistically the option is actually a false economy as the debt consolidation loan repayments are unsustainable in the long term.

So whilst the global credit crunch has reduced choice in terms of credit consolidation options for many people in Ireland perhaps it will serve to enable a material number of people to face up to their personal financial reality and choose debt solutions that do not require further borrowing.

News Source:
http://myvesta.ie/