Most people have several different debts, ie., credit cards, loans and overdrafts. Debt consolidation Companies advise that you can take the hassle out of this combination of monthly out-going payments, by consolidating debts, with no worry about tarnishing your credit rating. But it is not the case, when this method is in practice.

Methods:

The most popular method of consolidating debt is to move all of your loans to a single loan with a lower rate of interest. Unlike credit cards (that have annual percentage rates in excess of 10%), many loans are available at cheaper rates of interest. Borrowers need to pay one fee a month and can easily track the progress of their loan. But, you should only borrow, if you can secure a competitive rate of interest that will bring your monthly outgoings down.