Debt consolidation is taking one single loan and replacing several other debts and loans. And there are some definite benefits to doing this. For many people who find themselves in over their heads, it can be a life-saver. They’re struggling to make their payments, and they’re coming due at different times during the month making stressful burdens on them.

One of the unfortunate things about all these debts is that the largest part of their payments will be interest payments. Debts like credit cards and unsecured loans can eat people alive with their interest rates. So while they make payments they only manage to pay a very small amount toward the principle.

Debt consolidation loans are most of the time low interest loans. The duration of repayment is matched up with your circumstances and finances. They enable you to replace your smaller loans and debts with one loan that carries a low rate of interest. This is turn lowers the hassles of multiple bills that come at you at different days of the month. These loans help you to pay off your debt much quicker for less amount of cash outlay and take away a lot of stress from your bill management and answering to creditors.

Debt consolidation can also be accomplished without having a specifically tailored debt consolidation loan. It is sometimes done by using an interest free credit card transfer. You just transfer all your debts onto this card and make one payment as you would with the loan. But this is not necessarily a good way to go about this. The reason is that if you find yourself unable to pay off the full balance of the card before the interest-free period expires, you’ll be expected to pay high interest fees that will be applied to the remaining amount. And this could well serve to perpetuate the problem you had in the first place.

It’s a good idea to contact a professional debt help organization and get some advice on just what way to go for your particular situation. This way you can have more confidence in your decision and the steps you take to get yourself out from under the stress and worry of debt. And you can do it in a way that saves you in both time and cost effectiveness. But don’t let debt dictate how you live your life, and rob you of the right to enjoy your life without having to struggle each month with bills and debt.

By Jasmina