If you are in debt and have a bad credit history / rating and are finding it hard to meet your repayments, a debt consolidation loan from a bad credit loans lender is often the first and only option many people consider. However there are alternative ways to get out of debt that can be a better option for you. Below are three steps you can take to get out of debt without taking on another loan. In fact these steps will still be very useful to do even if you do go down the debt consolidation route as they will still make it easier to manage.
This is probably the most obvious and yet for many people the most difficult to do, CUT DOWN YOUR EXPENSES! OK here comes another word most people shy away from BUDGET, first off list everything that you spend money on, including that sneaky starbucks. Then look at what you can reduce / cut out, do you really need all those cable TV channels? Are you really making the most of your cell phone call plan or could you pay less by going to a pay as you go plan. There are many thing you can do to reduce your expenses that will not turn you into Scrouge. For more ideas visit Money Saving Tips.
Again reasonably obvious but a little harder to do INCREASE YOUR INCOME! Once you have increased your income do not use it to increase your spending, instead use it to pay off your debt.
Probably not so obvious but again very easy to do. SELL YOUR UNWANTED STUFF! Go around your property and sell off anything that is unused or unwanted, including the kids, no wait I was only joking about that, but do get them involved. Doing this can bring in a healthy income stream for you and help to declutter your home (which can have a positive result on your state of mind). Post your items on eBay, Craigslist or have a garage sale, or go to a car boot sale.
In a previous post I covered a method of paying off you debts as quickly as possible
Here is a quick outline of that method
List all your debts with their APR and outstanding balance
Take the debt with the highest APR and put the extra money you have to make more than the minimum payment on that debt until it is paid off
Take what you were paying on that debt and start paying off the next highest APR debt.
Repeat until all debts are cleared. All the while remember to make the minimum payments on your other debts.
So there are some alternatives to taking out a bad credit loan as a debt consolidation.