Consumers are advised to research assistance options for bad credit debt as secured personal loans require some form of collateral, and if consumers are not careful with their repayment habits and budgeting, they can lose this collateral if they are unable to pay this consolidation loan.
Example, some homeowners use their home mortgage as a way to erase various debts, but refinancing with bad credit score may not be possible or would not bring a lower mortgage interest rate, which again could cause overall costs increase. Although, even for someone in a good position seeking to consolidate debt, failure to pay a consolidation loan through either cash-out refinancing or using one’s home as collateral could cause an individual to lose their home
Beware of debt Consolidators who promise to take care of everything. When considering debt consolidation, you need to educate yourself in order to avoid the vast amount of scammers who are out there trying to take your money. Beware of companies charging high fees to help you, since this will only make your monetary burden much higher. Is it worth paying someone else to do what you can do on your own, i.e. negotiate lower interest rates and stretch out your repayment schedule and pay off the highest-interest debts first?