Phoenix, AZ -- (SBWire) -- 09/26/2013 --For those folks whose credit has deteriorated over the years, there’s a way to improve it through a bad credit debt consolidation loan. Credit-yogi.com is here to share its expertise on this subject, such as:

- Unsecured Consolidation Loans
- Home Equity Loans
- Peer-to-Peer Loans
- Borrowing against a 401(K)

Unsecured Debt Combing Loans

People looking for a bad credit debt consolidation loan may find it hard to uncover one. Unsecured consolidation loans are particularly difficult to obtain with poor credit because most lenders want three basic things from a “safe bet” borrower: low debt-to-income ratio, stable income, and a near-perfect credit history. Obviously, those whose credit has been damaged won’t qualify for this kind of consolidation loan. Fortunately, there are other options which will be discussed in the following sections.

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Home Equity Loans

It’s possible to own a house and still have bad credit. For those in this situation, try utilizing the equity in the home to get a bad credit debt consolidation loan. Home equity loans are excellent for this sort of thing, as they are secured by home itself. Take out the loan and use it to pay off all of one’s debt. The home equity loan will have a reasonably low interest rate despite one’s poor credit because it’s backed by the house as collateral. Merging the debt will eliminate having several payments a month, leaving instead just one. Check into this as a way to improve bad credit and eradicate debt.

Loans between Individuals

Peer-to-peer (p2p) loans are those between to individuals that are mediated by a neutral third party, and are good for bad credit debt consolidation. For some p2p loans, the borrower writes out his proposal and hands it in to a board of investors. They go over the proposal and decide whether or not to accept it and approve the loan. In other p2p loans, a third party funds the loan and then sells shares in it to investors

Making Use of a 401(k)

Many employers offer a 401(k) retirement plan. If one has been contributing to his for some time, it may be a good idea to borrow against it and use the money as a bad credit debt consolidation loan. There’s limited risk in this type of loan, as it’s basically using one’s own cash to get rid of debt and fix one’s credit standing. The interest rate on such a loan is low, making it easy to repay.

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