Sometimes you get in over your head; way over. This can happen with debt relatively easily, so don't feel bad if it's happened to you. You can get in debt a variety of ways, either through one or more unplanned, one time expenses, such as medical bills or car repairs, or through a pattern of spending that slowly leads to massive debt from which you're unable to recover.

If you have ended up with that kind of debt load, you've got a few choices. One issue you'll probably have to face is the fact that, after such financial hardships, you probably have pretty bad credit. That will limit your options somewhat, but you still have some good options available, given your credit situation. You can get a bad credit consolidation loan, declare bankruptcy, or seek credit counseling in order to repay the debt. You can also try to go it alone, but unless you ended up with the debt problem through a few isolated incidents, you may have problems developing, implementing, and following through with a plan to get yourself out of debt. In addition, if your financial circumstances have changed, and you've experienced a loss or reduction of income, you may be unable to repay the debt.

If your income picture is relatively good, however, and you own your home, but you've amassed a large amount of high interest consumer debt, a bad credit consolidation loan is one option you should strongly consider. One of the primary problems with consumer debt, such as credit cards, is that they are unsecured. The lender has nothing but your promise that the debt will be repaid. That increased risk makes the interest rate higher than if the lender had something they could take possession of in the event you default on the loan. In addition, most credit cards have an interest and fee structure whereby late payments or charges over the limit will substantially increase the interest rate you pay. You can easily wind up paying an interest rate of well over 20%!

A consolidation loan, on the other hand, is a secured loan. The lender has the ability to take possession of something, typically real estate, if you default on the loan. Their lower risk is reflected in a much lower interest rate. What does that mean for you? You'll be paying a substantially lower total payment every month after you get a bad credit consolidation loan than if you paid only the minimum on your high interest credit cards. In addition, many lenders recently increased their credit card minimum payments from 2% to 4% of the outstanding balance. You'll pay the balance off much faster, but it will sting your monthly budget badly. As an example, a credit card with a 22% interest rate and a $5,000 balance would have a $200 minimum payment.

If you have a few of those, you can see how badly that could impact your monthly cash flow. You could easily pay $1,000 in just monthly minimum credit card payments. To make matters worse, even at the $200 monthly payment, it'll take you 171 months to repay the debt, and you'll pay over $4,100 in interest on a $5,000 debt. That 171 month time frame is only true if you do not use the card. If you charge more on the card, it will take even longer to pay off. You'll be a debt slave for 15 years!

The bad credit consolidation loan allows you to break the cycle by combining all your debts into one loan. You'll also receive a much lower interest rate, typically half or less than you're paying now, if you have high interest cards. Another benefit is that, with a consolidation loan, you'll have a far lower chance of accidentally being late on a payment, an occurrence which can cost you plenty in fees and even higher interest rates.

Just because lenders are cracking down on those with less than perfect credit, it doesn't have to be you - You can find how to get lenders to want your business and even beg you for it! Go to the bad credit consolidation loan guide.