How to Consolidate Your Debt

Mounting debt and harassing creditors calling every day can make a stressful situation almost unbearable. If your efforts to manage your debt independently are failing, it might be time to consider a bad credit debt consolidation loan. By taking this step, you'll be satisfying your creditors and beginning to take control of your debt repayment. Be sure to compare offers, examine interest rates and anticipated repayment duration, and ask questions before settling on any consolidation program. Follow these steps to consolidate your debts into a loan:

1. Analyze your situation:

The first step to taking control of your finances is acknowledging your debts. Who do you owe? How much? What are the interest rates on your credit cards? What do you earn monthly? Are you saving anything? If necessary, put it on paper. Make a list, and assess the data. Is it time to get help?

2. Fill out the questionnaire:

By filling out the debt consolidation loan questionnaire, you're starting the process. This no-hassle, no-fee process starts by providing simple information such as your name, address and facts such as estimated debt.

3. Initial contact:

A debt consolidation specialist will contact you about arranging a loan. It's here that you'll provide facts such as who you owe and how much. You also can ask questions at this stage to learn more about the process.

4. Your application is processed:

Your debt consolidation service evaluates your situation and processes the application. Factors such as who your creditors are and how much you earn will be part of the process. The service will formulate a plan that pays off your creditors and establishes a monthly payment system for you to pay off all your debts into one consolidated loan.

5. Decision time:

As the borrower, it's your responsibility to look over the proposal and determine if it's the best choice for you. Find out about interest rates, the loan term and any fees associated with the process. Be sure to ask your counselor questions before agreeing to the loan.

6. Your creditors are paid:

It might take 30-60 days, but your creditors will be paid and you will stop receiving harassing phone calls. Verify that the debts have been paid before you stop making individual payments. Your consolidator will notify you when the loan is official and your creditors have been satisfied.

7. Make one monthly payment!

Now that your debts have been consolidated, it's time to make just one convenient monthly payment and watch your debt disappear! Be sure to stay current with your payments and, if possible, pay more than the minimum due to eliminate the loan faster.

Confused about debt consolidation? Answers to our frequently asked questions may clear up some of your confusion.