Is Debt Consolidation The Solution?

People who are greatly in debt see debt consolidation as an answer to their problems

. But if that person has already defaulted on his/her credit card, mortgage and other payments, his/her credit report is already likely to raise a couple of red flags. Then the big question would be, is it possible to get a debt consolidation loan on bad credit? The answer to this question is "yes", you can.

If missed and late payments keep you up at night and if you fear those collection agents like the Bogeyman under your bed, then bad credit debt consolidation may just be the thing for you. This type of loan is especially made for those with people with poor credit ratings. The main purpose of this loan is to help people who are battling debt to eliminate their outstanding payments simply and without delay.

As you might find that major financial firms might not be open to offer you a loan with your poor credit history, there are some special loan providers who have people like you as their clients. A means to debt consolidation can be a home equity loan and the interest rates on such a loan are fairly low although you will need to own a house to avail of this alternative. You can still avail of this type of loan even if you are unemployed.

If you are short on assets, the next best thing is to find unsecured loans. Providers of such loans might be rare in these times of crisis, but you should be able to find a few nonetheless. With this type of debt consolidation loan, you have to be prepared to pay a higher interest rate. But if your main objective is rebuilding your credit, you just have to tough it out and pay the high interest rate.

If you have a lot of questions about your present financial condition, the amount of money that you need and the right channels to get the money, a financial consultant is what you need. Once a loan is secured, use the money to pay off all your debts. Ideally, you should begin with the larger payments first because they can potentially create the most amount of trouble like wage and bank garnishments and a levy on your assets. If you plan well, you will be able to get just enough money to pay off all your debts so that you are left with a single loan.

It is very important that you pay your monthly payments diligently, this will slowly and steadily pave the way to rebuilding your credit.

by: Pam Berger

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