A debt consolidation loan is like a two sharp edges sword: on one hand, this type of loan would help you reduce the interest you're currently paying on your credit card debt, but on the other hand, it does nothing but getting you deeper in debt, mostly if you are inclined to spend a part of this loan on your pleasures and not on repaying older credit.

For people with bad credit, debt consolidation could remain a dream forever, as borrowers are very careful lately to whom they are giving money. This financial crisis made them think twice before getting you approved and granting you the loan that would allow you refinance all other loans you have, thus letting you with this last one, with a smaller interest rate. A secured loan would be probably hard to get if you have a bad credit score, so you could forget about that option. Going for unsecured loans could be an idea, but usually, unsecured loans are more expensive than mortgages or secured loans, so you need to do your math to see if you're saving or losing money if you go for a debt consolidation loan in these conditions.

Maybe instead of going for one more loan, you'd better start by contacting your creditors and asking for a re-negotiation of your contracts. Banks don't want to take your home, they don't want you to become unsolvable, they just want to help you go on with your payments until you repay them everything you've borrowed. This is how they make the profits, and not by selling your house and taking their share of the money. So, borrowers have the interest to renegotiate your terms, as they want to keep you as a client and they want you to afford paying your loan rates.

After this step, if you don't manage big deal, you can see if you qualify for a secured bad credit consolidation loan. Beware though, this means another mortgage on your home, so if you still can't pay what you owe on time, you may end up homeless. There are many people who landed in this sad situation because of their desperation to make ends meet, which made them not think clearly anymore.

If you aren't eligible for a secured loan, then you're in trouble. Getting an unsecured debt consolidation loan isn't the best option of all, because of the higher interest rates of such loans. However, you can negotiate your terms. Here, you could use some debt settlement letters, if you can obtain them. You need to show that you're willing to get out of debt, and not that you're only sinking deeper.

If you're uncertain on how to proceed, you can do a research for some debt consolidation companies that could help you see the light again. They aren't free, but if they manage to get your loan and get you our of your financial trouble, that would be worth the money.