Debt restructuring is possible despite poor creditworthiness, but not always easy. Nevertheless, borrowers often have slightly better chances than when taking out a loan, since banks also know that debt restructuring makes sense from an economic point of view. http://www.ukauctions.org.uk/consolidation-loans-for-bad-credit-request-the-best-consolidation-loan-today/ has details
Provides the sum to repay the existing loan
If, as a borrower, only a fraction of the original interest or installments is paid from then on, the borrower will naturally incur significantly lower costs. Nevertheless, of course, you have to prove your creditworthiness to the new lender, who after all provides the sum to repay the existing loan.
This is done through an automatic query of the private credi checker by the credit institution, as well as through proof of income, which the borrower must hand over to the bank without gaps. A rough breakdown of the fixed costs per month is also often required, so that the bank can estimate how much leeway is left in the borrower’s finances to pay off the loan.
If the borrower has always paid back his previous loan without hesitation, even if the full amount has not yet been paid, the chances of a successful debt rescheduling increase despite poor creditworthiness. If, on the other hand, the borrower has been noticed more often in the past due to burst installments or unpaid bills, all of which are recorded in the private credi checker, they must also expect the new bank to reject them. Then you can often be happy to have received a loan in the first place.
Bring additional collateral for the bank into the loan agreement
If the borrower knowingly has a bad credit rating, he should try to persuade a person to act as a guarantor for the debt rescheduling. Close friends and family members may agree to this if the amount of the loan is not too high. The loan amount should also only be used in the amount required to fully pay off the existing loan.
A debt rescheduling despite poor creditworthiness is possible via a guarantee, but only if there is a person who willingly vouches for it. In addition, of course, contrary to the borrower, this person must have a high credit rating. Only then can the loan be issued at all.
Guarantees from friends and relatives may be more willing to accept this risk if the borrower clearly shows them the financial benefits of rescheduling and how much can be saved. This is not a guarantee of finding a guarantor, but it does increase the chances of a successful debt restructuring to a certain extent despite poor creditworthiness.