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Debt Consolidation

The two most common consolidation options for reducing are either through rearranging finances by way of a consolidation loan or by restructuring your repayments with your existing creditors. 

Option one allows you reduce your monthly outgoings by combining all your debt into one lower monthly repayment.  By clearing all your debts this way you can hope to maintain a clean credit history by not falling behind on payments.  This is an option for people who are meeting their current monthly obligations but are finding difficult to do so.

Option two is more serious and is for people who possibly have tried to obtain a debt consolidation loan and have been turned down.  You are most likely already in arrears and missing payments all over the place.  With this option you or a debt management company negotiate with all the people you owe money to either extend the period you are paying over, reduce the interest or freeze it altogether.  Once everything is agreed you pay the amounts agreed each month.  If you use a debt consolidation company you will pay them a monthly amount which will include their management charge and they will then pay the correct amount to each of your creditors.

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