Are you having trouble meeting your minimum monthly payments on your credit cards or personal loans? Do you have store cards or gas card payments that you're not making? How about medical or utility bills? If you find yourself cursed with more debt than you can handle and it's getting worse each day, consider Debt Consolidation as a tool that could help.
This is a term given to describe the process whereby a number of debts are combined (consolidated) into one larger debt.
People find this appealing because instead of having numerous payments every month, they now have one.
Even more compelling is that your repayment plans will typically include paying a lower interest rate and a lower monthly payment.
These funds are then disbursed to all your creditors, who will be happy to work with your debt consolidators because they know they will get their money back.
The downside to a debt consolidation loan is that, despite a lower interest rate and reduced monthly payment, you will be extending the length of time that you will be paying on this loan.
The plus side is that you should not have any more late fees (for not paying your monthly bills on time) and your monthly payment will be lower than you were paying before, with all of your past payments combined.
Be aware, however, that debt consolidation could affect your ability to discharge debts in bankruptcy.
Also, a debt consolidation loan will be more expensive in the long run and, depending on the amount of the loan, could take years to pay off.
If you are capable of self restraint in not running up your credit cards again just because they have zero balances, want to rebuild your credit rating and be responsible for your new debt by paying it off on time, then debt consolidation might be what you need to get out of your present predicament.