So like millions of other people, you are having some financial difficulties which has resulted in a bad credit score making it nearly impossible to get a debt consolidation loan.
What can you do?
Fortunately getting a loan to consolidate your debts is not the only solution. After all getting a new loan to pay off old loans is not really a solution anyway. If you have bad credit you will likely need to consolidate your debts through either a debt settlement or credit counseling program. These programs do not involve loans of any sort. Instead they are 2 ways to manage and reduce the debt you have.
Debt settlement is a negotiation process. Most people hire debt settlement companies when they need a big debt reduction. The settlement companies will contact your creditors and try and work out a reduced payoff amount helping you get out of debt faster.
Unlike debt settlement where you only end up paying a portion of what you owe, in credit counseling you pay back everything you owe through a consolidated payment plan with lower interest rates and fees.
Which Bad Credit Debt Consolidation Solutions Should You Choose?
That really depends on your situation and comfort level. There are never any guarantees with the debt solution process and this is especially true in debt settlement. It is entirely possible that your creditors do not want to negotiate or that they don’t reduce your balances as much as you hoped. So debt settlement does have that risk. In addition, your credit score will be even more damaged during the process.
Credit counseling does not carry the same degree of risks that a debt settlement program does but you also do not reduce your overall payments as much so that’s the tradeoff.
Learn as much as you can about both solutions, speak with a few companies, and then decide what’s best for you.