The best way to think about debt consolidation is as a combination of several different debts, loans and credit card payments into one loan in order to lower monthly outgoings.
If you have exhausted other options, such as payment holidays and reduced payment windows, a debt consolidation loan could offer the solution to your financial problems.
A dept consolidation loan pays off all existing debt, student loans or credit cards so you are left with one affordable payment.
Payments are more manageable because interest rates are more favourable; credit cards, for example, have very high interest rates when you step into the red.
Furthermore, payment can be spread over a longer term further easing monthly outgoings.
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If you cannot secure a loan to cover all your debts, ensure that you pay credit cards and the loans or debts with the highest interest rates first.
Make sure you are comfortable with the terms and conditions of any debt consolidation loan.
You need to understand the entire process, if there is any clause or items that are unclear to you, ask that the lender explain them in detail.
If you have a good credit history you may get a lower interest loan, conversely if your credit history is poor you might have to pay a higher interest rate.
If you are facing financial problems that are the result of high interest loans or a change in your earning capacity debt consolidation is service you should consider.
However, before committing to a company you should check with the Better Business Bureau and with online communities to see if there are any adverse comments before you decide to go with them.