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Debt Relief Consolidation in These Tough Times

Once you're in debt, it's a vicious cycle which is hard to break out of. With the economic situation the way it is, if you have found yourself with multiple credit card debts which you're making only minimum payments on each month, you're not the only one. In fact, hundreds on thousands of people have fallen into more and more debt as inflation pushes prices up and people borrow money to maintain the living standard they are accustomed to. If this sounds similar to your situation, don't give up just yet - with some debt relief consolidation and careful overview of your spending, you can beat the debt cycle and come out with a clean credit rating. It might seem like you're the only one, but you're definitely not. It's difficult to admit to debt in our society, for fear of being labelled an "irresponsible spender" or a "financial risk". Often, the people who apply these labels have never themselves experienced serious debt and don't understand that when push comes to shove, you're making choices between paying electricity and putting food on the table. It's easy to feel depressed and alone, but don't let these issues drag you down. You have to be positive and proactive to regain control of your finances.

Government Debt Consolidation

There are a number of different government departments which offer loans to help people, particularly students, consolidate their debts and manage the loan from one easy-to-track fund. If you qualify for this type of assistance it can help no end when it comes to consolidating your debt quickly, erasing the debt and improving your credit rating. Government debt consolidation can be either secured or unsecured, depending on what program you apply for.

Consumer Debt Consolidation

This is a much more common method of consolidating you debt, and involves taking out a loan from a lender to pay off your debts, and then managing the single loan with easy once-monthly payments. A consumer debt consolidation program can be either secured or unsecured, just like a government debt consolidation program. It's important to investigate all types of consolidation and the different programs different lenders offer in order to find the right solution for your needs. After all, if there were a quick and easy universal solution, debt wouldn't be the problem it is.

Unsecured Loans

Unsecured loans are typically for smaller consolidated debts. If you want an unsecured loan a good starting point is to Google different lenders and their programs, what they offer, what their interest rate is and what other fees and charges would be associated with a loan. When you go into different banks, explain your situation. While bad debt often impedes your eligibility for loans, many lenders have programs designed especially for people trying to get out of debt. You may choose to take out a small debt consolidation loan online. If you do this, make sure you check the credibility of the lender. If you go in person to a bank, once you choose a lender make an effort to get to know the representative. The more personally your lender knows you, the more likely they will be willing to tailor a program to suit your situation and be flexible if any problems arise.

Secured Loans

You may only be able to consolidate larger debts with a secured loan. Secured loans can give you much more money because the lender has the assurance of collateral, usually your house - more commonly known as a mortgage. The interest rate of these loans is almost always better than that of an unsecured loan, although the life of the loan is much longer so remember; assess what is best for your situation. It is less common to find a secured loan program completely run online but the internet is still an invaluable resource for researching what standard rates, fees and charges are. Debt relief consolidation is just a starting point when you decide it's time to take back control of your finances. While managing your debt responsibly and tracking where your money is being spent is a significant step in the right direction, you should also start to pay particular attention to how you were able to accumulate so much debt in the first place. Is it normal for you to be in debt, or was it series of bad circumstances that led you to max out a number of different cards? It's important to be honest when facing the real issue, because only then will you be able to come up with a real solution. It might even be worth taking some money management classes - they may be an expense now, but an investment in your education, especially when it's in relation to your financial planning skills, is a wise move and something you will draw on repeatedly in the future.