The prevalence of credit cards with high interest rates often causes individuals to spend beyond their means and get into unmanageable debts. To get out of debt, many may have to think of debt consolidation. Debt consolidation facilitates low interest payments and lower monthly expense.

Debt consolidation means consolidating and restructuring all or most of the prevailing debts in a form that is easier to repay. It is suitable for individuals who have high rates of interest on mortgages, car loans and multiple credit cards bills. Debt management companies or financial organizations that specialize in debt consolidation handle debt consolidation.

Debt consolidation can be done by obtaining debt consolidation loans or by enrolling in a debt management service. By obtaining a debt consolidation loan, an individual can consolidate all the debts into one single loan amount used to pay off the debts. The loans are negotiated at lower interest rate with a favorable monthly repayment schedule. Debt consolidation loans can be secured or unsecured. An individual may either opt for secured loans or unsecured loans.

Alternatively, an individual may prefer debt consolidation by enrolling in a debt consolidation service or a debt management plan. In a debt consolidation service, the firm

negotiates with the creditors for lower interest rate and waiver of fees and penalties and restructures the repayment of debt on terms favorable to the customer.

Those who are not sure how to handle their debts can seek help from a certified counselor who can point out the various options and their inherent advantages and disadvantages and suggest a best option for handling the debt.

Before approaching any organization, it is worth the effort to shop online and compare the best deal a firm has to offer for debt consolidation. This can certainly save a few hundred dollars.

The FTC gives free information to the customer regarding fraudulent business practices. They can be visited at their official website at www.ftc.gov.