A lot of people fall into a very serious debt problem mainly because they are not really good at managing their finances.  Having so many debts is worrisome.  You will receive collection letters almost daily and consistent get phone calls from credit companies.  Many individuals can’t take this kind of life anymore, and so they resort to debt consolidation.  Debt consolidation is one way to eliminate your debts and give you peace of mind.  This will also teach you how to manage your finances well.

Here are several steps to manage your finances as well as your debts by way of debt consolidation:

1.    Gather up all your debts. Bring out all your bills or statements, calculate them, and get the total.  This way, you’ll know how much you owe and which debts can be qualified for debt consolidation.  If monitoring your debts was never part of your prospectus, then this is the time to start doing it.

2.    Compare your monthly bills and the payments you’ve made.  If you have the habit of paying just the required minimum payments of your bills and leave a balance, your debts definitely are going to pile up since the balance that has been forwarded to the next paying month already has interests attached to it.  You may be very aware of this, but you just keep on ignoring it.  If you’re faced with this kind of problem, you better start looking for a solution and debt consolidation may be the perfect solution.

3.    Apply for a debt consolidation loan. If you are through gathering all your statements or bills, you may now approach credit institutions or banks that offer a debt consolidation loan.  If you are not sure what the processes are, you can either ask for the help of a debt consolidation company or, if you prefer doing it on your own, you can conduct some research first.

4.    Choose between a debt consolidation program or debt consolidation loan. While in the process of finding a solution to your problem, one of the steps is to choose what debt solution is ideal for your situation.  If you choose availing of a debt consolidation loan, the loan will be handed down to you directly.  However, with this kind of solution, you have to see to it that you only take an amount that is sufficient to pay off all your debts.  As for a debt consolidation program, the company itself will take care of the payment of your debts and they will also give you some advices on how to manage your finances properly.

5.    Pay promptly. Pay your obligations on time and you will have no further problems.