Debt consolidation is a good thing to help you get rid of your debts. But for this to be successful, you have to choose well the debts that are to be consolidated. You also have to pick the right company to help you with this. The sad thing is that some people find themselves deeper in debt because they have made mistakes in the process of debt consolidation. So avoid these 4 usual mistakes and you may well be on your way to being debt free.

The first mistake that people make is leaving everything up to the debt consolidators. While these companies are there to provide you with assistance, it does not mean that they will take care of everything for you. You still have to know where the money you have is going and what plan this company has in getting rid of your loans. Find out the steps of the plan, the length of the entire process, and make sure that there are no hidden fees. These things have to be perfectly clear right from the start so that you do not get any shocks in the future.

People also make the mistake of going through the debt consolidation process without a plan. This is a very important thing so you should naturally have a plan with it. You cannot just start with it unless you have been able to make a good plan. It is not a casual undertaking. If you want to get all the bills consolidated, you need to put together proof of the debts, the pay stubs that you have recently accumulated, and your newest tax return. Have these ready prior to meeting with the debt consolidation firm.

While you may be tempted to have all of your debts consolidated, this is not necessary. Not every debt you have is a cause of problem for you. A consolidation loan usually comes with higher interest rates. You do not need to include the debts that come with lower interest rates and are not causing a problem. This is where the planning comes in since you need to decide which of the debts are to be consolidated.

See to it that you do not just fall for everything that the debt consolidation company tells you. It is not a fast process so you should not decide fast as well. Be careful and set criteria for choosing which firm to work with. Review their offers and if it does not sound realistic, go for somebody else.

Debt consolidation offers vary and some of them are quite tempting but you need to look at all the factors prior to choosing something. You need to be part of the entire process to make sure that you understand what they are doing to your money.

By Jasmina