Consolidating debt is a process whereby you combine all your debt into one, easy to manage, loan or payment, in order to get into the right position to start to consolidate credit debt there are some steps you must take first.Many people are facing terrible financial situations due to the global economic crisis and a great number of these people are looking at ways to ease the pressure on themselves, both mentally and financially, but how can they do this effectively?
Well, up until very recently the only effective way to avoid complete financial capitulation was to enter into a debt settlement program, as the option to consolidate credit debt through the use of a consolidation loan was all but closed; apart from to those that didn’t really need it, as financial institutions were reluctant to lend money to any one who was in the slightest way a risk to them, although this situation is currently relieving itself thanks to government directives and bail out money.
So what are the three necessary steps to take for consolidating credit debt?
1. List your debt:
It may sound obvious but you would be amazed how many people don’t do this correctly. It would be wise to know just how much debt needs to be consolidated, some people would say that you do not need to consolidate all of your debt; but if you are going to go through the process of consolidation it may be wise to put all your eggs in one basket.
2. Comparing interest rates:
Interest rates should always be compared there is no point in combining all of your debt if the interest rate of the consolidation loan is greater than the average rate of all your debt. However, there are methods you can employ that when put into use at the same time as consolidating will ensure this is a certainty.
3. Get some counseling:
There is no shame in asking for help; there are professional people out there, highly skilled in dealing with debt and the consolidation of debt who can offer you free counselling and advice and to ignore this wealth of experience would be foolhardy.
Although these steps are no more than the preparation phase before consolidating credit debt, they are extremely important as they are the foundation for everything that follows.
For more information about credit card consolidation and debt consolidation or if you would like to know more about a little known, but extremely effective, method of debt elimination that will help you become completely debt free in 3 – 5 years, click: credit card consolidation
(Author: Daniel Major – Published: September 28, 2009)