How To Consolidate Credit Card Debt With Bad
Credit
Author: Carrie Reeder

There are a lot of advertisements for credit card
consolidation, but the biggest problem is that your credit must
be good in order to get approved. Unfortunately, most people
that have struggled to make the minimum payment on their card
each month, have also occasionally made a late payment,
tainting their credit in the process. What is a person with bad
credit to do if they are interested in consolidating their
credit card debt into one low interest, easy to pay loan?

Use the Equity in Your Home

One of the easiest ways to secure a credit card consolidation
loan when you have less than perfect credit is by putting up
the equity in your home as collateral. If your home's value has
increased since you purchased it, you can borrow money against
that amount. A lender isn't as concerned with your credit when
you take out a home equity loan to pay off your debts. For the
lender the risk is minimal. You don't want to lose your house,
so chances are that you are going to do everything in your
power to see that the home equity loan payment is your first
budget priority. If for some reason you can't pay the loan
back, the lender doesn't lose out, because the company can
recoup its investment by acquiring your house.

Expect Higher Rates

If you have bad credit and you are not a homeowner, there are
still ways for you to get a consolidation loan. However, you
have to expect a higher rate of interest than you would have if
you had the collateral of a home or better credit. Doing your
research and comparing debt consolidation loan companies will
ensure you get the lowest rate possible for your credit
situation.

Use a Credit Management Service

Credit management services that negotiate with credit card
companies to lower your debt often have programs in which they
pay your monthly payments to all of the companies that you owe,
using money from the one check that you write to them each week.
While it isn't exactly a consolidation loan, because your
creditors aren't paid off all at once but instead receive
monthly payments, it functions the same way that a
consolidation loan does. It lowers your interest and allows you
to make one monthly payment instead of several.


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