Tuesday, July 6, 2004

Can I Consolidate With Bad Credit?

Consolidating debt can be confusing at the best of times but if you have bad credit, consolidation can become far more complex. Even if your credit score is low, there are still ways to consolidate your debt and make your monthly payments more manageable.

Home Equity Loan

    If you own a house, you can apply for a home equity loan. This type of loan will usually have a lower interest rate than credit cards and may be tax deductible. You can use the loan money to pay off your credit card debt and then owe the money to the lender who provided the home equity loan. This can help you to consolidate your debt but if you default on the loan you may lose your house.

Debt Consolidation Companies

    There are many companies that work with customers to help to consolidate debt. Often, they charge a monthly fee and help you to negotiate better terms with credit card companies and consolidate your debt into one monthly bill. These companies can be helpful and often work with bad credit but, make sure they are legitimate and pay close attention to their terms before working with them.

National Foundation for Credit Counseling

    The National Foundation for Credit Counseling is a nonprofit organization that provides credit counseling and advice on debt management. This service is free and confidential.

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