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Consolidating credit cards and loans

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Next, look at your monthly budget and add up spending on the basic necessities like food, housing, utilities and transportation. However, those characteristics – effective budgeting and motivation – aren’t generally evident when people fall behind on their bills.And that’s is where a The conventional method for consolidating debt is to get a loan from a bank, credit union or online lender.

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In other words, if you’re ready to turn your financial life around, debt consolidation can help do it.If you continue to overspend with credit cards or take out more loans you can’t afford, rolling them into a debt consolidation loan will not help.The first step is to list the amount owed on your monthly unsecured bills.The chase to catch up with your bills will never end.Putting the credit card away would be a first step, but not the only one you need to consider before deciding that debt consolidation is your financial savior.If you are falling behind paying off your credit card debt, it’s very likely your credit score is tumbling, too.

If the interest rate you get for a debt consolidation loan is not lower than the average interest rate you already were paying on your credit cards (see above), then a debt consolidation loan does you no good.

Debt consolidation is especially effective on high-interest debt such as credit cards.

It should reduce your monthly payment by lowering the interest rate on your bills, making it easier to pay off the debt.

The loan should be large enough to eliminate all the unsecured debt at one time.

The loan is repaid in monthly installments at an interest rate you negotiate with the lender.

Add the bills and determine how much you can afford to pay each month on them.