Are you losing sleep over the debts you have incurred with your frivolous spending or due to some unfortunate circumstance? Are you not able to pay off your debts on time? Have your debts become so unmanageable that you are clueless over what can be done? Then it is time for you to take some professional help and go for bad credit debt consolidation. There are various debt consolidation companies in the market today offering debt consolidation services.

The debt management companies employ debt counselors who are trained in designing bad credit debt consolidation programs for the borrowers. The counselors first assess the nature of the outstanding loans, financial position and repayment capability of the borrower before they actually go about the consolidation process.

Three Options For Bad Credit Debt Consolidation

Bad Credit Debt Consolidation Loan - This debt consolidation loan clears off all the existing debts of the borrower. Therefore the borrower has only one loan outstanding. This loan is advantageous to the borrower because as against the multiple debts he had to clear previously he is now responsible for only one outstanding debt. But the disadvantage is that this convenience comes at a higher rate of interest. If the borrower has a bad credit history then the interest is even higher.

These loans are of two types: Secured and Unsecured. Secured debt consolidation loans are issued against some security like house or vehicle. Advantage of a secured loan is that interest rate is lower than the unsecured one. Disadvantage is that if the borrower defaults this loan then his security is at risk. The unsecured loan is issued without any security.

Debt Settlement - Here the debt consolidation company negotiates with the creditors to fix up a debt consolidation program, which will suit the borrower. The debt counselors of the company may negotiate to get some debt written off, , get a reaffix on the repayment period , or get a reduction on the interest rates. This will reduce the debt burden on the borrower and make repayment easier.

Debt Management - The debt consolidation company takes up the responsibility of managing the debts of the borrower. The borrower makes one consolidated monthly payment to the debt consolidation company. The company then distributes the amount amongst the different creditors in such a way that all outstanding debts of the borrower are slowly cleared.

Keeping these options in hand, the borrowers with the help of the debt counselors can also design the best debt consolidation program that would suit their needs. Here it has to be kept in mind that the program must be designed in such a manner that it makes the borrower debt free in the shortest possible time at the least possible cost.