The most common solution to get some breathing room between you and your debt

What Is Debt Consolidation?

In a nutshell, debt consolidation allows you to borrow money to pay of existing debt and pay with one monthly loan payment. People generally choose to use debt consolidation when credit card debt becomes too much to handle and you want to avoid bankruptcy. To alleviate some of the stress, debt consolidation is an option you should consider.

How can Debt Consolidation Help Me?

The benefits are many:

1.	Your monthly payments will immediately be lowered by up to 50%.
2.	Creditors will stop harassing you and debt collection actions will stop.
3.	One lower monthly payment.
4.	Your credit rating won't be negatively impacted and in fact, may improve.
5.	You avoid bankruptcy.
6.	Interest on a secured debt consolidation load is tax-deductible.

What are the Disadvantages?

There are some drawbacks to using a debt consolidation loan to lower your debt payments:

1.	You generally need to own a home and must qualify for a mortgage. (Unsecured loans are available)
2.	You may lose your home if you can't keep up with your payments.
3.	You still owe every penny of your debt. Consolidation only restructures it.
4.	Does not force you to learn money management skills.
5.	Allows you to easily slip into more debt.

Often debt consolidation becomes necessary when someone loses their job or primary source of income and monthly bills becomes burdensome. In this particular scenario, it would also be difficult to be approved for a new loan as the lender may not think your ability to repay is dependable.

When Is Consolidating Debt a Good Idea?

If you don't want to risk your good credit rating (if you have one) and don't mind paying your full balance over a long period of time, then debt consolidation is a good choice. It may also be a good choice if you're are already good at managing your money, but maybe have incurred a large amount of debt thru a circumstance out of your control. (like medical bills, etc)

Tips to Consider When Consolidating Debt

Debt consolidation may be a strategic and effective way to get your financial house in order; however, there are certain factors that should be considered as you undertake the consolidation process.

Be Self-Controlled. The most common negative aspect of debt consolidation occurs when someone takes out a loan to repay old debt, but then runs up the credit card debt again; thus doubling the amount of their debt.

Unfortunately, this scenario plays out with a lot of people that obtain a debt consolidation loan because so many individuals have a problem with using credit cards too much. For this reason, you may want to consider closing all or most of the credit accounts you have when you obtain a debt consolidation loan. Leaving one or two in case of an emergency will keep you protected but not give you enough rope to hang yourselfagain.

Look at your Income and Expenses. Be sure to fill out the free household budget worksheet to map out your budget and see how much you can afford to pay toward a consolidation loan.

Examine the Loan Details. You should look at interest rates, repayment terms, monthly payments, and the long term expense of consolidating. Shop around to get the best deal.

It is important for all factors to point to a debt consolidation loan. You do not want to jump into something only to find out that your monthly payment increases, when the primary goal was to lower your monthly obligation. You want to be knowledgeable in your decision and the consequences.

How to Obtain A Debt Consolidation Loan.

The first rule is in saving money is to shop around - and certainly applies here. You can get the best rates on the best debt consolidation loans by looking online for quotes. All reputable debt consolidation companies will give you a free - no obligation quote online or over the phone.

CuraDebt is one company that offers a wide variety of consolidation programs and will give you a free consultation.

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Did You Know...

49% of adults, and 66% of US high school students got F's on a national test on their knowledge of basic economic principles.

Food for Thought...

"I'd rather go to bed without supper than rise in debt."
-Ben Franklin.