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Is A Debt Consolidation Loan Your Best Option?

May 6, 2008
Debt can be a major cause of stress and anxiety. Struggling to make minimum payments on your bills may be an indication that a debt consolidation loan may be a good option for you. Consider theses things first.

A debt consolidation loan is essentially a loan for the total of all your existing debt. It may just include your credit card balances, or it may go further by covering other debts such as car loans or department store credit. The consolidation loan is used to pay off all the other debts, leaving you with a single monthly payment which is often at a lower interest rate.

Before you decide to pursue a consolidation loan, there are some alternatives that can help with your debt.

1. Ask For A Lower Interest Rate

Credit cards are notorious for their high interest rates, but you can often get a better rate by calling and asking them for it. The credit card industry is highly competitive and there are plenty of companies who would love to get your business. They often send out special offers of low rates, and if you call and ask your current credit card company to match one of those they often will in order to keep your business.

2. Manage Your Debt More Effectively

Rather than getting a loan to consolidate your debt, you might simply need to learn how to effectively manage the debt. There is plenty of information available for free on the internet, and most cities have non-profit organizations that will help you with debt management.

3. Get A Bank Loan

If most of your debt is on credit cards, you may only need to consolidate that debt into a single loan. Your bank may be able to offer you a better rate on a smaller consolidation loan to cover your credit cards, while leaving any other debts where they currently are.

Consolidation of debts can efficiently save you money and decrease the monthly stress of locating money for multiple payments. If you're dealing with unmanageable debt, this may be the solution for you.
About the Author
Are you looking for more information about debt consolidators? Visit http://www.debtopedia.com for more tips about consolidating credit cards and other credit card payoff tips.
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