Consider debt consolidation if you owe money to many different credit providers, be it for cars, credit cards, home loans, hire purchase agreements or any other kind of debt, it is costing you a small fortune in charges and interest.
The best way to deal with this situation is by consolidating all of your debt into one loan, paying off the smaller debts and only servicing one loan. The benefits of this are lower interest rates, far less bank charges and an easily manageable single amount to repay all of your debt.
If you own your home, debt consolidation becomes a lot easier, Firstly check to see whether there is any available equity in your home loan. Using the available equity in your home loan is the fastest and easiest way to consolidate your debt and bears the lowest interest rate over the longest period, effectively reducing your repayment amount dramatically.
The money you have taken from your home loan to consolidate debt can be repaid with no penalty to you when your financial position improves and in doing so will show you to be a responsible debt manager, improving your credit rating.
It is important to manage your debt and to deal with it by consolidating before any debit orders are returned by the banks. As soon as your debit orders are returned, your credit score will suffer as each time this occurs, it appears on your credit report.
The other method of consolidating your debt is by collecting all of the information pertaining to the debt like the period of the loan, repayment amounts, start and end dates, amount loaned as well as all of your personal financial information and approaching a financial institution to effectively buy that debt. What they will do is grant you a single loan and negotiate with the financial institutions about repayment rates, period etc.
Again it is important to try to anticipate your ability to repay and consolidate before you are in serious financial trouble. However, having said this, there are still options available to you if your credit score is very poor and you find it difficult to repay your loans.
Banks and finance companies want you to repay your loans and they are quite willing to assist you to meet your obligations. Talk to them about the options available.