If you are struggling to keep up with your payments because you have so many different repayments to make each month or you don’t have enough income to cover all your commitments it may be time to look at debt consolidation as a way of getting all your debts into one regular monthly repayment.

If you have high interest loans and credit cards, debt consolidation could be the best solution for you.  You save money with lower interest rates and you will only have to make one monthly repayment which makes it so much easier to manage your debt repayment. 

If you have a number of credit cards and can only afford to pay the minimum monthly payment you would be paying off those cards for a very long time.  In most cases, the banks minimum monthly payment covers little more than the interest charged each month.

So, if you have decided that debt consolidation is the best way forward, you need to sit down  with a nice cup of coffee and write down all of your debts on a piece of paper.  Include the name of the creditor, the total amount owed, what you currently pay each month, what the minimum payment is, and the interest you pay.

Once you know how much you need to consolidate all your debts, the next thing to do is apply for the loan.  If you need less than $25,000 and have a good credit history, you may be able to apply to your bank.  If you have already been late with payments or have credit cards over the limit, then you will probably need to look for someone that specialises in debt consolidation.

Once you have consolidated all of your debts it is best to avoid building up more debt on credit cards before you have paid off your debt consolidation loan.  Often people who get a debt consolidation loan fall into the trap of using their credit cards before the debt consolidation loan has been paid off and they end up in a much worse situation than they were in before they got the debt consolidation loan.