Debt is becoming a massive problem in our country today, more and more people are borrowing money and using credit cards with out having sufficient funds to pay them back.

It is very easy to fall into debt, just when you think you have your finances in order your car could break down or a problem with in your home may occur where by the only resolution is to borrow money to fix the problem.

One of the best ways to help with debt problems is to consolidate your debts. Debt consolidation is a way to pay off all your existing debts leaving you with lower monthly payments. If you are considering consolidating your debts be sure to look around for the lowest interest rate possible this will save you even more money as the monthly payments will be less so you should be able to pay off the loan sooner.

Home owners are at an advantage when consolidating their debt as they can use the equity in the house. Using your home you are more likely to get a much lower interest rate however it is important to understand the risk you are taking should you not keep up with the monthly payments.

Always read and understand all the terms and conditions of any type of loan, if you were to unexpectedly come into some money and want to pay the loan off make sure there is not a large fee for doing so. Also make sure you are covered should you be out of work.

It is important when consolidating your debt to factor in everything you owe, missing out a loan or credit card will leave you with two payments going out and it surprising how this can lead to three then four and before you know it you have spiralled back into debt.

Having poor credit can affect your chances of being able to consolidate or get any sort of loan. It is very easy to have a poor credit rating, trying to pay the minimum monthly payment on loans and credit cards can be difficult and by only paying the minimum amount you are only paying interest, should you miss a monthly payment you are likely to be charged therefore increasing your debt.

Most loan companies will offer to send you cheques made out to your credit card companies and loan companies, this is a really good way to make sure you pay the existing loans off as it can be tempting to spend the money should it arrive as a cheque addressed to you.

One of the main benefits of consolidating your debt is that all your loans and credit card bills will be one single loan, making it easier to keep track of. Try to restrain yourself from using your credit cards again once they have been paid off so that you only pay off your consolidation loan.