How to consolidate your debt

Dealing with debt should be the priority of every responsible person out there, and it can also be easy if you follow certain steps

08:49 09 September 2013

Having many smaller debts to pay monthly often means that the interest you end up paying is higher, but if you were to get a bigger loan with which to repay all of the other debts, the interest could actually be lower and you may save a lot of money doing so. However, there are two faces of debt consolidation, so here is what you need to know about it before you start:

• the only requirement for debt consolidations are either an available open credit or enough home equity; you could otherwise try to obtain a loan from family members or friends;

 

• lenders will analyse your credit situation and bank history before choosing to either grant you the debt consolidation or not, so make sure that you make your payments in time and don't have too much debt;

 

• Don’t be afraid to negotiate with your lenders. Make your debt collectors understand that they have to work together with you if they want their debt consolidation done faster;

 

• Try to understand that debt consolidation is a slow process. It takes time for you to do it, so don't quit if it doesn't pay off from the very beginning;

 

• Make sure that you don't accumulate more debts during the process of debt consolidation. This may be tempting since you may believe that debt consolidation will take care of that in the end.

Keep in mind that you can always look for alternatives to debt consolidation, such as selling some of your belongings that you don't actually need anymore or taking up another job to increase your financial situation.