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If you start to find it difficult keeping up with your monthly bills, possibly because you have so many different accounts to repay, or maybe your income is not sufficient to cover all your repayment requirements, now is the time to start looking at how a debt consolidation loan can help you.

If you have a number of high interest loans or credit cards, you could benefit greatly from a debt consolidation loan. Not only will you save money by lowering the interest rate, you will now only have one loan repayment to make which makes managing your finances so much easier.

Another point to bear in mind is that if you have several credit cards and you can only afford to pay the minimum monthly amount required, you may find that you are paying off those cards for the rest of your life. More often than not, the card companies design the minimum payment to repay all of the interest owed, but to pay very little off the actual capital balance. A previous article I wrote demonstrated how it would take 97 years to clear a credit card debt of £5,000 by just paying the minimum monthly requirement.

So, you have decided that a debt consolidation loanis the best way forward. The best thing to do now is to sit down and write down all of your debts on a piece of paper. Add the name of the creditor, the total balance owed, what you currently pay each month, what the minimum payment is, and how much interest you pay.

Once you know how much you need to consolidate all your debts, you need to apply for the loan.

If you need less than £15,000 and have a clean credit record, you should be able to apply to your bank. However. if you have already missed payments, then you will probably need to find a company that specialises in debt consolidation loans, as they usually cater for people with less than perfect credit records.

When you are offered a loan you may not be offered enough to clear all your debts. This being the case, you will need to decide which loans would be best to consolidate, and that the consolidation loan is will actually benefit you. If the new loan has a high interest rate, it is possible that you may not be helping yourself out financially. You need to weigh up what the new loan will cost as opposed to what you are currently paying.

Having consolidated all of your debts, avoid racking up more debt on credit cards and loans before you have paid off your loan. It often happens that people who get a debt consolidation loan later fall into the trap of using their credit cards again, long before the debt consolidation loan has been paid off.

If you do find that you require another loan, try to research the available products as best you can in order to get the loan with cheapest rate available.

Mark Dawson writes for Loan-Arrangers .co.uk where visitors can compare cheap UK loans online. Then apply for the best loans online and poor credit loans available.