Many people who have a bad credit score due to mounting debt often turn to a bad credit debt consolidation loan for assistance. While there may be some who benefit from this type of debt consolidation, it may not be for everyone.
Many people with bad credit look to consolidate their debt in the hopes that it will be easier to manage and they will be able to get out of debt and increase their credit score in a timelier manner. While this may be the case for some people, usually, just pooling your debt isn’t going to afford you the ease of paying it off, but rather with interest, you may pay more over the long run.
One of the best ways of getting out of debt is by attacking your debt one source at a time. Some people will focus on the smallest amount of debt first while others focus on the highest interest rate to begin with, but the point of this method it to take out one debt source at a time.
Paying as much as possible on one source of debt, while making minimum payments on the rest of your debts, is a method made popular by financial guru Dave Ramsey and seems to be one of the best methods in dealing with debt.
However, if you do opt for consolidation for your bad credit debt, make sure you realize that you may spend more over the long run if you only make the minimal payments. Budgeting, saving, and paying as much as you can on a debt consolidation loan and paying it off as quickly as you can is one of the only ways you are going to benefit from consolidating your debt.