5 Easy Steps To Do It Yourself Debt Consolidation

The whole idea of consolidating your debt is to roll all of the money that
you owe into one single secured loan. Instead of paying a large number of
debts off to debtors, each with separate rates of interest, which push your
debt up higher and higher by the month, you will be left with one manageable
payment.

A word of warning though, debt consolidation loans will need to be secured
with a substantial amount of collateral, like your house or your car. If you
don't pay the payments on a secured loan then the lender, or financial
institution can, and will take your secured assets as payment for what you
owe them.
Getting Started With Your Debt Consolidation

Step One: The first step that should be taken before you even consider
arranging a consolidation loan is to work out how much you owe, and whom you
owe it to. By working out your debts, you can come to a balance that you
will be working on paying off in the following months of your life. Be
honest with yourself don't leave any debts out.
Put Away The Credit Cards!

Step 2: No more credit! Put away your credit cards, in fact cut them up so
that you can't use them. If you are really serious about consolidating your
debt and getting it paid off you have to make a commitment to yourself that
you will not do anything else to incur more debt on yourself. Period.
Time To Go Visit A Few Banks

Step 3: Go and visit the bank. Now that you have sorted out how much you
owe, and whom you owe it to, and understand that there will be risks
involved in taking out a consolidation loan, you need to go and visit a few
financial institutions.

Never take the first offer given to you, especially with debt consolidation
loans. Don't apply for too many loans, while you are looking. This may show
up in your credit report and cause even more damage. A good idea is to order
your credit report from one of the three major credit reporting companies
and take it along to show the loan officer.

Interest rates are likely to be higher than an ordinary loan.
This is especially likely if you have done damage to your credit report from
not paying your debts, or you don't have a great deal of collateral to bring
to the table. If you are teetering on the brink of bankruptcy, expect to pay
more in interest rates and charges for a debt consolidation loan, because
you are a high risk to the lender.

With that said, shop around some financial institutions will offer you a
better deal than others, and when you are so far in debt the difference
between 12% or 18% will make all the difference.
How Much Can You really Afford?

Step 4: Work out what you can afford to pay, and how long you want to take
the loan out for. This is where budgeting is vital, work out what you can
afford to pay, and be realistic.
If you end up with repayments that are too high, you may be tempted to live
off of your credit cards for personal expenses and use your income to pay
your bills.

This is a big mistake, and will more than likely result with you in even
further debt then before. Worse still with your consolidated loan you stand
to loose everything if you can't make repayments. Make sure that the
payments are within your reach before you sign up for your consolidation
loan.
You Don't Have To Do This Alone

Step 5: Get advice. Unless you are a financial whiz, and if you were then
you wouldn't be in debt anyway, you need sound advice on how to manage your
current situation. Maybe you could use a professional's help to find a
consolidation loan that isn't too risky, because of inflated interest rates.

Is A Debt Consolidation Company Right For You?

Never be too proud to ask for help, debt consolidation companies will often
give people in serious trouble with debt, a free consultation, and if you
need it, they can work with you, and teach you how to manage your debt.

Not all consolidation companies have your best interests at heart, and you
should be wary of those who are asking for large amounts of money from you,
or urge you to make donations.

A reputable councilor will advise you on the best way to manage your debt,
and have access to free educational sources and workshops. After all,
ignorance is never bliss when it comes to your financial situation.

You don't have to rely on a debt counselor to do everything for you. You can
do this yourself. By going for a free consultation, a counselor can put you
in touch with learning material and put your situation into perspective for
you. A counseling session will usually last and hour, and after that you are
given the choice to book another appointment if you want to.

About The Author: Liz Roberts is a loan consultant & a freelance writer for
http://EzCreditRepairSolutions.com Which specializes in credit repair tips &
helping people improve thier credit. For more articles on do it yourself
credit repair please visit
http://www.ezcreditrepairsolutions.com/DIYcreditrepair.html