Pointers for Landing a Bad Credit Debt Consolidation Loan

The scenarios are as varied as those who can contract debt. Perhaps you are struggling to keep abreast of a half-dozen credit cards. Medical bills, student loans, car notes and other personal obligations can seem insurmountable when different amounts are due at different times of the month to different creditors at different interest rates. Because of all this, you are missing payments and your credit rating is suffering. Living paycheck to paycheck and squandering all your income to meet bill after bill means that you are a good candidate for a bad credit debt consolidation loan.Just what is a bad credit debt consolidation loan?Most financial advisers, and even the Federal Trade Commission, indicate that a debt consolidation loan is almost a panacea for consumers who are at their wits end managing overwhelming debt. Basically, instead of trying to pay off a dozen or so debts every month, you gather up all those debts, pay each off with a debt consolidation loan, and then make one payment a month. Thereby you satisfy a bunch of creditors, keep your credit rating from getting even worse, and give yourself a whole lot of peace of mind.You really have to consider all the expense your debt is causingBy consolidating your debt, you can actually start to make a dent in the principle you owe. With multiple debts you are spreading your cash too thin. It is a known fact that when you reach a certain debt to income ratio you are banished to a land where principle never decreases. It increases monthly. You are at a point where you are paying only interest and fees, and not even doing that very well.Bad credit means diligent shopping for a consolidation loanMost traditional lenders are not going to be able to help you. A credit score hovering around 600 will be considered less than perfect and will raise a flag. A score under 500 will put you in the sub-prime category. Both of these mean that you are going to be paying very high interest rates if you get a loan at all.Find an online debt consolidation lenderYour best bet would be to go online and search for debt consolidation lenders who specialize in dealing with those who have bad credit. Many folks in need of debt consolidation have bad credit, due in part to these recessionary times. You should avail yourself of the shopping opportunities online lenders will afford. Since traditional lenders have tightened their standards, private lenders have stepped in to fill the breach and competition can be fierce. You should research five or six lenders before you decide on one or two to begin your negotiations.Interest rates will be higher, but your payments will be lowerOnce you find a lender who will work with you, understand that your interest rates will be very high. But your monthly payments will be far less than the aggregate of all your former lenders, probably reduced by as much as 50-75%! And your interest rates will not be that much higher than the others averaged. Plus, you will be rescuing your credit rating and having a lot easier time meeting your monthly obligations. Do not even mention the peace of mind you will gain.