By Christina Patterson
A major obstacle to leap over for those wanting to consolidate all of their debts is frequently bad credit, but this should not be an insurmountable hurdle if you want to gain control of your financial circumstances. If you are way above your head with debt and behind on your loan payments, the odds are good that you already face the problem of poor credit. While you may have once had a very good credit rating, changes in your financial situation may have led you to fall behind, and the result of that new financial hardship is that you suddenly find yourself saddled with a poor credit rating. That means finding a reasonable loan at a reasonable rate may no longer be a simple task.
You may be one of thousands who are struggling and looking for a method to get your head above water, but when searching for debt consolidation poor credit could stand in your way. If you find yourself swamped in debt and constantly struggling to make even the minimum payments, debt consolidation may be one alternative way to ease your payment burden. Consolidating several high-rate credit cards into a single, lower-rate card could possibly be an option, however if your credit rating is already suffering and you find yourself with a poor credit score, finding a lower-rate card will likely be difficult. A simple debt consolidation loan may also be available, but beware of extending yourself too far in order just to survive through a short-term rough financial patch.
Legitimate Debt Consolidation Options
When it comes to debt consolidation poor credit can easily make your situation worse, if you aren’t especially careful. There are a number of legitimate ways to consolidate your debt even if your credit rating is suffering, including using equity in a home or vehicle if necessary. However, there are a number of unscrupulous types around who like to prey on those who are suffering with credit problems. These shady dealers see bad credit as an opportunity, and they know that for people looking for debt consolidation poor credit will likely shut them out with the bigger lenders. These less than honorable financiers often use what the desperation on the consumer’s part as a method to steer them into a financially dangerous arrangement.
You may also be able to find an unsecured loan which will allow you to consolidate several other debts as well. However, this too can be a dangerous undertaking, so make certain that you fully understand all of the fine print of the loan agreement before you sign. One benefit of using an unsecured loan for debt consolidation is that it will have no impact on your important assets, such as your home or other valuable property.
Debt consolidation can be a helpful means for which to improve one’s financial condition, especially when hard times happen. However, for debt consolidation poor credit can be a big stumbling block, so make certain you consider any consolidation loan or program wisely before you sign on the dotted line.