When your debts are piling and your monthly payments overwhelm you, it is time you learned how to consolidate debt, and that is precisely what the next steps are all about. Follow them and you will be able to obtain all the information you need, solve you financial problems and avoid future concerns. Read more here - http://www.toptenreviews.com/money/debt/best-debt-consolidation-companies/.
1. Request your credit reports and analyze them carefully
These reports will show you all of your debts and how they are reflected in your credit score. Check for mistakes that could negatively influence your credit score and ask that they be rectified. You may not realize it, but lower credit scores usually mean higher interest rates.
2. Regularly make an inventory of your debts and incomes
Take a piece of paper and write down all the loans you want to consolidate, their balance, monthly payments and interest rates. This way, you will be able to identify which debts are more important, if any of them can be renegotiated and how much money would be needed to repay them.
Also assess what the maximum amount you can afford to pay every month is, so that you can make sure you do not exceed it when you negotiate the terms of the consolidation loan.
3. Find the loan that will allow you to consolidate debt without exceeding your budget
With so many lenders and different offers out there, choosing one will not be easy. Take your time, do your research, compare loan costs and reputations, and choose the offer that matches your needs best. Some lenders will offer you more than it takes to consolidate your debts or convince you to settle for less.
It is important not to fall into their trap, which is why you should know exactly how much money you need and how much you are willing to pay every month in order to obtain it. Otherwise, things will only go worse and your debts will continue to pile up.
4. Applying for a consolidation loan
Once you have found the right way to consolidate debt, it is time to apply for the loan and obtain the lender's approval. In order to make sure your application is successful, prepare the papers that can prove both your debts and your income, and fill in the requested information attentively.
5. Consolidate your debt
Make sure the money you obtain through the new loan goes directly into the accounts of your old creditors. If you keep it for too long, you may be tempted to spend some of it, and that would surely not serve your purpose, to consolidate debt.