Just the sound of the phrase “bad credit debt consolidation loan” scares me and it should you too. Anytime you are dealing with something that is referred to as a bad credit loan, you are asking for trouble. There is a reason these loans have been labeled as “bad credit.” They come with strings and in most cases this is not good news.
It is bad credit loans that are partly to blame for the mortgage crisis. If you have credit problems and debt, why would you want another loan? Financing debt with debt has never been a good idea. Besides that, people with good credit are having a hard time getting loans now. I think the era of easy credit is over. If you do not meet certain standards, you will not be extended credit.
The standard debt consolidation loan is secured with your home, as long as there is equity available in your home. This means that if you default on the loan, you could lose your home through foreclosure. Putting yourself in this position is not smart at all. If you have credit card debt without a loan, you can be harassed by collectors, sued by your lenders and have your credit ruined. But you will not lose your home.
If you need help paying off your credit cards and other unsecured debts, a nonprofit credit counseling company is you best alternative. These companies work with other types of debt relief organizations. So, no matter how bad it looks, there should be able to refer you to someone that can help you.
These companies are easy to get started with. You tell them home much debt you have and they give you a quote for a monthly payment. It takes 3 to 5 years to complete the program. You interest rates are reduced to around 10% and your fees are eliminated. This is going to save you a lot of time and money.
It is your debt and no one can tell you how to manage it and you should get all the facts before you make a decision. But a bad credit debt consolidation loan is something you should think hard about. There are other debt relief methods that are less risky and can have you debt free in the same amount of time.