The Insider Secrets Of Bad Credit Debt Consolidation

What shape is your credit in? Are you floundering and finding it difficult to keep up with even your minimum monthly payments? If your credit score has dropped over the past months due to falling behind on your payments to your creditors, you may be in need of a bad credit debt consolidation plan. In simple terms, you may find that you can relieve some of your monthly payment burden by consolidating several high rate loans or credit cards into a single loan or card at a lower annual rate.

How does it work? Simply stated, you might be able to combine a number of loans or credit cards which carry a high rate into a loan or credit card that is available at a lower annual percentage. This sort of debt consolidation is often done when a consumer receives a credit card promotion offering them a rate that is lower than their existing cards, provided they transfer balances to the new card. This can be a quick and easy way to reduce the annual rate on outstanding balances and lessen the minimum monthly payments as well. However, before you combine all of those credit card balances onto a new card with a lower APR, make sure you read all of the fine print and understand exactly what you can expect to pay on the new, combined balance.

Of course, if your credit score has slipped you may find it difficult to locate a lower interest rate on a credit card. For some with bad credit debt consolidation may seem like a solution to their financial worries, but for them, finding a lender or credit card issuer who will help them lower their interest rates may seem impossible. While in the past only those with the most flawless credit could command the best rates, scanning the lending marketplace today tells us that there are lenders available for just about everyone, and even those who suffer from a very low credit score should be able to find a bad credit debt consolidation loan. Due to problems in the economy, today there are plenty of consumers who have less-than-perfect credit, and many lenders willing to service their needs.

And finally, here’s a little “secret” to bad credit debt consolidation that often goes overlooked: don’t forget the equity you may have in a vehicle. While most people think of equity in a home, if you have a vehicle with low miles and a low payoff balance, you may find that you can get a used auto loan at a rate that is far lower than the rates you’re paying on your credit cards. In some cases, these auto loan rates can be had for even half the interest rate of your highest rate cards. If you’re looking for a bad credit debt consolidation option, a vehicle may help you drive your way to your financial goals.