If you have finally decided to consolidate credit card debts, congrats for taking it seriously to reduce your personal debts and pay off whatever amount you owe in the fastest way possible. There are several ways to consolidate bad credit debts and the main focus is to reduce your overall interest rate so that you are stop your debts from growing larger. Professional debt consolidation companies accredited by the BBB are recommended if you have a lot of complicated debts and are behind payments. Even though these charge a fee to consolidate your bad credit loans, it is still worthwhile as you can reduce your debts systematically. Otherwise, you can try to consolidate credit card debts yourself. It really depends on your financial situation and how fast you want to eliminate debts.
Most people think that you need a legitimate debt consolidation service provider, but this may not be the best way to reduce your debts fast for people with decent credit scores. However, when you already have slow pays and CCJs etc recorded on your credit file, legit debt consolidation companies are indeed the best option available. They can immediately negotiate with your creditors for a reduced debt settlement amount and you can immediately start to rebuild your credit score.
Actually, consolidating bad credit installment loans on your own is quite simple. Yet, many people still have problems paying off their creditors because they lack a plan to systematically reduce the balance owed. That is why hiring a debt management firm to handle your credit card debts can be worth the fees.
If you still have relatively OK credit ratings, you should quickly take out a new low interest rate loan such as a home equity credit line to instantly pay off all high interest debts. This allows you to replace all high interest loans with a single low interest loan that is more manageable and you save a lot more money in the end.
You can get a secured personal loan at cheap rates yourself, by arranging with the banks. Next, negotiate with your creditors and all credit card accounts to be paid in a lump sum. That is all to this simple method of do-it-yourself consolidate loans with bad credit. You are now left with a single big loan, but since it is low interest, your monthly payments are smaller and manageable. This is more convenient compared to making multiple payments to every creditor, which can easily cause you to miss one payment and get penalized with expensive late fees.
There is no need to hire anyone to consolidate credit card debts if you only have a few accounts. Just make sure you do it as early as possible before your FICO score gets lowered by more late credit card payments. This is very important to ensure you can get a cheap $10000 cash loan to consolidate consumer debts.
Another approach is to transfer all your balances to the credit card with zero APR. This help to stop interest fees from accumulating and gives you a few months of time to pay off the balance. Note that you may not be able to find easy approval zero balance transfer credit cards for people with bad credit, so you need to sign up while your credit is not damaged.
These are easy ways to reduce your debts for free. Consolidating all your credit card balances onto a single account with free balance transfer makes it easy to track your payment progress and less deadlines to worry about. With the zero APR offer, you can pay off more debt principal even if you do not have more money for payments. As long as you do not add more expenses to your cards, you will be out of debts sooner.
The next step you can try is to find surplus cash for debt payments. For example, if you have some assets such as stocks or bonds, consider liquidating these to pay off your high interest unsecured loans. The returns from low risk investments are not likely to exceed bad credit loan rates, so you should take care of bad debts first before setting aside money for investments.
You need to pay much more than the minimum payment required by banks and creditors if your goal is to become debt free as quickly as possible. You may not realize this, but by paying only the minimum monthly amount, you are only paying for the accrued interest, so your debts remain the same. That is why you need to try to increase the monthly payments and lower the debt interest rate at the same time. This can be done through bad credit loan consolidation or credit card balance transfer.
For people with more than $30,000 credit card debts, it is recommended to get profession help from BBB approved debt consolidation companies as their services are verified to be honest and fair. A good debt advisor can help to review your credit history, income and debts to create the best plan for paying off your credit card debts faster. He or she will negotiate and bargain with your creditors for lower interest rates and reduced settlement sums, which is worth paying their consultation fees.