Learn How to Consolidate Debt

People need a break, there's little question about that. While experts are now saying that the economy is back on its way up, unemployment is still rising, and credit is tighter than ever; just try getting a loan. Debt was piling up on my desk for a number of different accounts, it was overwhelming. Now I'm feeling much better, ever since I learned how to consolidate debt.

Learning how to consolidate debt isn't difficult. A debt consolidation company is a third party lender that will, essentially, take all off your outstanding debt (credit cards, mortgages, car or student loans) and pay them off. Just like that. They will float you a loan for this total amount, and then all that is left is to pay the monthly payment for this one single loan. This was especially great for me. I had trouble simply juggling the different monthly payments that came in at various times during the month. Keeping track of all the different payments cost my hours of my time every month. Now? It couldn't be easier to make the one single payment, fifteen minutes, tops.

Learning how to consolidate debt is easy. Most of these debt consolidation companies will be looking to give a secured debt consolidation loan. Secured debt consolidation loans will offer lower interest rates, typically, because there is some collateral behind it. The most common type of collateral is home equity. You can build home equity if you have paid off a substantial amount on your home loan or mortgage, or, (rarely these days) if you have managed to see the fair market price of your property value climb significantly in the last few years. You may still be able to get an unsecured debt consolidation loan, but the rates probably won't be as favorable.

In fact, simply knowing how to consolidate debt doesn't necessarily mean you should do it. There is a distinct possibility that you will be in debt longer if you go the route of debt consolidation, or that you end up paying more over the long term. There are benefits to debt consolidation, but you should consult a trusted lender for advice. Your mortgage broker or trusted lender can also help you find debt consolidation companies in your area, if they themselves don't provide the service anyhow. Either way, knowing how to consolidate debt gives you the proper perspective on whether it is the right personal finance move for you.