Consolidating multiple debts into one new loan is simple, especially consolidating a few student loans into a single loan. However, the process will be more challenging if the applicants have bad credit. People with poor credit are considered as high risk borrowers by the lenders. In order to obtain the loan successfully, most of the time, the applicants are required to put up collateral to secure the loan. If you intend to look for this type of loan, you are reminded to consider a few important matters below:#1 – The LendersObtaining financial assistance from traditional banks or financial institutions is indeed hard. Hence, you are advised to spend some time and effort in searching for the specific lenders which welcome people with poor credit. In general, looking for employees’ credit unions will be a better choice as they are more flexible.#2 – The interest rates offeredSince your credit is already bad, don’t expect to enjoy normal rate as other borrowers. The lenders usually charge higher interest rates for your loan. The Annual Percentage Rate (APR) can be within the range of 7% – 14% and above. As a result, you need to compare the different interest rates offered by various loan providers carefully before making your decision. For your information, a borrower usually gets lower interest if he or she can get a co-signer with good credit to jointly own the account.#3 – The repayment periodThe purpose of obtaining the loan is to remove bad credit. In order to increase your credit score, you are required to find out the exact loan repayment period. In general, many borrowers prefer to have longer repayment term because they want lower monthly payment. However, they are required to pay more interest over the long period. If you intend to improve your credit, you must make sure that you can afford to make your monthly payment on time based on your budget. Hence, you are reminded to assess your financial position carefully before taking up the loan. Don’t take the risk if you can’t commit.#4 – The redemption penalty involvedMany people tend to ignore the fine print available on the loan agreement. You are reminded to read all the clauses carefully to know what redemption penalties are if you want to repay your loan early. Don’t underestimate the penalty as it is an additional cost for you. Obtaining a debt consolidation loan is not impossible even you have low credit score. You should make good use of this loan to rebuild your financial strength.