Debt control is a challenge for everyone. Having bad debt like credit cards and personal loans is like having a ball and chain around your ankle, preventing you from reaching more important goals.Accumulating bad debt is very easy to do, and things can get out of hand very quickly. The important thing to remember is to address the issue as soon as possible and stay positive. Getting sound, trusted advice is important too, especially if you feel overwhelmed and don't know where to start.

Before you speak with anyone about regaining control of the situation, it's important to know exactly what the situation is. For instance, it's important to know exactly what your income is (wages, Centrelink, child support etc) and what your costs are (accommodation, food and groceries, transport etc). Then you need to know exactly how much you owe and who you owe money to.

Believe it or not, there are many options available for you to consider and Debt Consolidation is just one of those options.

It's really common for people to have different credit cards from different companies, old phone bills from previous suppliers and personal loans from different credit providers - so no wonder things can get confusing.

Debt Consolidation can be the answer because it collects all your bad debt under one single payment. As an affordable and practical way to handle bad debt, it can save a lot of confusion, time and of course money.

There are many ways to consolidate debts, so it's important to speak with an expert company that specialises in debt consolidation. In Australia, there are many companies that claim to be experts in debt consolidation, and it can be a minefield. It's important to ask questions like "If it turns out that you can't help me, will I have to pay you anything?" because there are some companies that will charge you huge fees for doing nothing.

Debt Companies that spend enormous amounts of money on TV and internet advertising have to get the money from somewhere to pay for that, and more common than not its comes from people that they couldn't help.

Other companies like Debt Fix for example, have a "No Fix, No Pay" Policy when it comes to debt solutions and Debt Consolidation. So if you're struggling to regain control of your bad debts and you need to consolidate your debts, make sure you get expert advice from a trusted company.

The Benefits of Debt Consolidation Loans

In our sophisticated age of internet technology and advanced banking, it can still be a struggle on occasion to manage our personal finances. There has to be an easier way, right?

If you want to manage debt more effectively, you need to know exactly what your personal outgoings are on a weekly / monthly basis and how that fits in with your budget. Being aware of the outgoings and knowing exactly where your hard earned dollar is spent is one of the key steps to taking control of your personal financial position.

To this end, a lot of people turn to debt consolidation as a solution to simplify things.

Debt consolidation may come in a number of forms, the most popular being a debt consolidation loan. Simply put, a debt consolidation loan brings together all the unsecured debts (credit cards, personal loans) into one onsolidated loan repayment.

This means that instead of paying several small payments, you would pay one big payment. The theory is that if all the debts were brought together into one payment, it would save time and money.

There is no doubt that debt consolidation is more convenient, after all it's much easier to pay one big payment instead of several little ones. Also, if debt consolidation helps make a budget more predictable in the sense that it's much easier to plan for and therefore remember.

The Pitfalls of Debt Consolidation Loans

Debt consolidation loans in theory represent a better way to take control of debt because they make budgeting easier, but there are some points before you agree to undertake a debt consolidation loan.

Before any debt consolidation is considered, it's important to know exactly your current debt commitments. You need to know exactly what your creditors are requesting under the existing contracts and then compare that to what you would be required to pay under a debt consolidation loan.

It stands to reason that if you had to pay more money to service the debt consolidation loan in comparison to what you are paying under the existing debt contracts, then a debt consolidation loan may not be the best idea.

The reason for this is that any solution must provide you with a benefit, and if the financial benefits of the existing debt contracts outweigh any benefits that a debt consolidation loan may provide, it may not be the best idea.

Also in Australia, debt consolidation loans are not easy to get if you are credit impaired, have limited assets and questionable serviceability. The ironic thing is that if you meet this profile, you may be the one most in need of a debt solution.

Finally, debt consolidation loans are only beneficial if they form part of an over plan to regain control of your personal finances. Debt consolidation loans are only effective if all the other lines of credit are cancelled, once the balances are transferred.

Unfortunately, it's really common for people to leave the credit cards open and available to use after a debt consolidation loan, and when this happens it's likely that the credit cards will continue to be used. If this happens, you could end up with double the debt that you had before.

In summary, debt consolidation loans can be a very powerful tool in the battle against personal debt, but there are some very definite pitfalls. As long as you are aware of the benefits and consequences of a debt consolidation loan, you are able to make an informed decision whether this is the best, cheapest and most effective way to take control of your finances.