Managing your personal finances and maintaining a good credit rating is getting to be a more difficult thing to do in this day and age. The recent slump in the US economy has made things even more difficult for many people now. Debt consolidation is one answer to many peoples financial problems and there are a few good reasons why.
Credit cards are a great way to build up a good credit rating but they also happen to be an easy way to ruin it. Many people who get credit cards are unaware of the clauses in the credit card contract that allow the credit card company to raise the interest rate on the card if even one payment is late. Many credit card companies even have a clause in their contract that allows them to raise the interest rate if you are late on any of your bills.
When they raise the interest rate it applies to all of the debt that has accrued on the card, so this can be devastating. One answer to this problem that many people face is to take out a personal loan to pay off all of their high interest debt and with this they will only have one low interest loan to pay off.
Once you get in the cycle of late fees and high interest rates with your credit cards they can run you into the ground. Even if you think that you won't qualify for a consolidation loan you may be surprised to find out that you do. Many times the loan company will give you the loan in the form of separate checks that are made out to loan agencies that you owe the money to.
If you own your own home or have any real property then you most likely will qualify for a personal consolidation loan. With a consolidation loan you can protect your credit rating, pay off all of your debts and be left owed less money then you started out with and have a lower interest rate on the loan.