Bad Credit Debt Consolidation

Debt consolidation is hard enough with good credit, but bad credit debt consolidation seems like an impossible task. If you do happen to find a lender willing to offer you a debt consolidation loan, the interest rates are so high, that it doesn’t make any sense to consolidate credit card debt. But if you utilize one of the following debt consolidation options, you will be able to find an inexpensive bad credit debt consolidation plan that doesn’t cost you an arm and leg.

A secured debt consolidation loan is the best way to consolidate credit card debt or any kind of debt for that matter. Secured debt loans offer the best interest rates for people hoping to fund a bad credit debt consolidation plan.

There are at least three types of low interest secured debt loan options available for bad credit debt consolidation: A home equity debt consolidation loan, a home refinancing debt consolidation loan, and retirement debt consolidation loan.

A home equity loan for bad credit debt consolidation is also known as a second mortgages or home equity lines of credit. These types of bad credit debt consolidation loans allow you to tap into the equity you may have in your home.

Home equity loans usually offer attractive low rates, even for consumers needing bad credit debt consolidation. The benefits of home equity loans is you can deduct your interest if you itemize your taxes, and many bad credit debt consolidation equity loans have no closing costs.

The second option for bad credit debt consolidation is a cash-out refinance loan. This type of loan allows you to refinance your house, and take out extra money to consolidate credit card debt or use however you would like.

With interest rates on home loans so low these days, a bad credit debt consolidation plan using this method may be your best choice. You may even be able to get a lower monthly house payment and get the debt consolidation loan you need.

Retirement loans for bad credit debt consolidation are your third low interest option. It is usually very easy to get a loan from your 401(k) or 403(b) plan, and some pension plans as well. Essentially, you are borrowing against yourself. You can borrow about half the value of your account to use toward bad credit debt consolidation.

The benefits of these loans for bad credit debt consolidation purposes are the low interest rates, usually in the single digits and the interest you do pay is to yourself. There is generally a quick payback period and it’s easy to borrow since there are no credit checks or income requirements.