Your Options

The three main debt consolidation options available to consumers:

Low interest debt consolidation loans can help you consolidate all your independent credit card accounts into one loan. These loans are either secured by collateral, such as your home or vehicle, or they unsecured, which does not attach collateral in the event you fail to pay as agreed but typically comes with much higher interest. Unsecured loans are one popular form of bad credit debt consolidation because you do not need a good credit score or any equity in your property to qualify.

Credit counseling is another debt consolidation service that can lower your interest rates and help you become debt free in four to five years typically. These programs, formally known as debt management plans, are typically offered by non-profit agencies who are subsidized by the credit card companies in order to encourage financially overextended consumers to pay their debts in full. Since the credit card companies give them kick-backs for administering these plans, the fees are usually very low, but the monthly payments can be high and very few consumers ever finish these plans.

Legal debt settlement is another type of program that offers the opportunity for consumers to pay less than the full balance they owe to satisfy their full debt amounts. This program offers the most significant savings, but comes with other costs, such as consequences to your credit. For those considering other bad credit options, such as loans and credit counseling, this may not be a major concern, however.