Once you've consolidated your debts by combining all of your credit card bills, telephone bills, utilities, alimony and such into a single and affordable monthly payment, you may have the option of enrolling for a debt consolidation loan.
This loan may be made by once again mortgaging your house or any other real estate property that you may have.
You may then use the money obtained this way to pay off your consolidated debts.
It is also a bit more flexible than that in such a way that you may pay other debts, consolidated or separate by rolling over into your mortgage.
This feature of the loan will then ease the gap between your earnings and the payment of your debts.
In no way does this free you of your financial obligations from your creditors, but it extends the payment plan so that it is more flexible and attainable.
Also, as with most financial and lending plans, it comes with its own advantages and disadvantages.
A debt consolidation loan will be a program or a plan that will be put in place by a lending company.
There are many lending companies that are available that have different plans, it would be best to check your finances and credit ratings before you go online, the phone book or in your mailbox for a lending company.
That may be one of the plans weaknesses.
The lending company may not be strong enough to hold up a number of these loans especially these economically challenging times.
It is a caution that must be noted also that if they are unable to hold up these loans then they will be late with your payments which will leave you with an even worse credit rating.
So the best step to make before taking this option is to find a trusted loan provider and be sure that they will provide you with a monthly explanation of the reduced interest rates and the monthly payments that they have made.
Versatile Application One of the features of a debt consolidation loan is that in most programs of most lending companies, you can choose where to apply the additional funds that you may send through your loan program that is paying your debts.
In a way, you may or may not help the program in completing the repayment of debts faster.
This, however, is assuming that you have extra funds.
There are also several other Consolidation loans that may be applicable for you, depending on what property you have.
By carrying out a home equity loan you can have a low interest rate which is currently below 10% plus the interest is tax-deductible.
Another similar option is refinancing your house for a bit more than the debt you owe and then using the cash difference to pay off some debts.
There will be low interest rates this way but the repayment period will stretch to typically 15 to 30 years which will quite a disadvantage if you have no steady job.
At best, this should be a one time option only.
Refinancing your car is also one of the versatile options, although the risk here is that your car might run out before you can repay your original debt.
In a way, a debt consolidation loan may not be a quick fix for those in deepening debt.
It is however a contingency fix, a resort of some kind for some space to maneuver your money and property around to get over and minimize your debts.
Just remember that if you don't own property, vehicles or if your credit rating is on the verge of being not so good then there are other options for you.