Debt in America is growing at an alarming rate and along with it bankruptcies and foreclosures. With more and more of us turning to such bleak ends it is crucial that people with debt know all the options available to them before accepting defeat.

One option is debt consolidation.

Debt consolidation is a popular service that essentially gathers all of your debts into one place with one interest rate and one monthly payment. Those that consolidate their debt benefit from the ease and convenience of having only one payment as opposed to multiple payments. Debt consolidation can be the answer to most of your debt problems but it does present its fair share of problems.

There is no such thing as a cure all for credit problems. The debt you incurred must be paid off and unless you can convince the lenders to forgive it in its entirety the debt is your responsibility. With the aid of debt consolidation you may be able to negotiate better terms and interest rates to ease the burden but it will certainly not make any of the debt disappear. It is also possible to receive a fixed rate interest with debt consolidation. A fixed rate is a set amount of interest that will not fluctuate. While a fixed rate of interest can be of benefit during times of high interest rates it will not be during historic lows.

Of course there is the possibility of debt consolidators taking advantage of those that find themselves in financial hardships. If you do seek debt consolidation make sure to shop around and find rates and terms that are agreeable to your unique situation. If you do seek the aid of a debt consolidation company then discuss all the terms, fees, and rates that you may end up paying. Most of the time, however, it is more advantageous to consolidate your debt on your own.

For some, debt consolidation is simply not a wise move especially if you are faced with bad credit since you will have to pay much higher rates, rates that may even be higher then you are already paying before consolidation.

Another option can be a home equity loan. With a home equity loan you are borrowing against the equity of your home. This will present very low interest rates when compared to the rates of debt consolidation and lower monthly payments.

Refinancing your car can also provide the needed money to pay off your loans and is often times overlooked. One major draw back to refinancing your car is that an accident may total your car and you will still be expected to pay off the loan.

Debt consolidation is certainly not all bad and in fact can actually help out many who find themselves in severe financial hardships. If you do seek debt consolidation as an answer then you will have to understand that you can negotiate the terms of the consolidation. While your financial hardships may look bleak you should still do as much homework and research as possible. Look into other solutions like equity loans first and then discuss the possibility of consolidation.

Most find it beneficial to discuss their credit debt options with a representative from the National Foundation for Credit Counseling of the NFCC. The NFCC is a non-profit organization with the aim of helping anyone facing financial problems with debt management.

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