Before applying for a debt consolidation loan, ask yourself: Am I sure there isn't any other debt solution for me? If you have made up your mind after doing proper due diligence and are almost positive that the best way to eliminate debt is by consolidating them, then this article is the next step for the best bad credit debt consolidation loan.

Check the Interest Rates and Terms

A debt consolidation loan has several benefits, let's focus on two for now.

* Turning multiple debts into one monthly payment
* Lower interest rates

If when quoted a debt consolidation offer and one of these two benefits is not there then the loan may not be worth your time and eventually turn out to be a big loss. To clarify, a person is in $50,000 debt, from multiple creditors and sources. The overall average interest rate is (for example) 7% and the debt consolidation loan is offered at a 7.4% with additional down payments and closing costs. It is easy to see that the consolidation loan is expensive and not beneficial.

The Cheapest Loans Require Collateral

Unsecured debts often carry higher interest rates than secured ones. By applying for a mortgage, refinancing or by getting a home equity loan, you have better chances of getting a low rate even if you have a bad credit score. When an asset such as a home acts as collateral the home mortgage lender reduces that element of risk involved with the loan and can afford to offer lower interest rates.