• Consolidating can save stress and money.dollar dc batteries image by Brent Walker from Fotolia.com
  
  When you carry more debt than you are able to pay, that debt can bring down your credit rating and cause daily stress from creditors calling to ask for payments. Debt consolidation offers a solution by combining all debts into one lump sum loan and a lower monthly payment. Choosing to consolidate unsecured credit cards, personal debts and student loans can offer relief for your debt problems.
  
  

What Debts to Consolidate

• High-interest-rate credit cards and personal loans are the number one debts to look at when consolidating. These type of loans can sometimes carry interest rates of more than 30 percent which makes it very difficult to work down the balance of the loan. Other debts to add to a consolidation loan include doctors bills and personal debts to creditors. Student loans can also be consolidated but not with other types of loans.
  
  

Repayment Plans

• Take time to do your budget so you know how much you can afford to pay for a consolidated payment. If you go to all the trouble of getting a consolidation loan and still cannot pay the bill, the consolidation won't help you at all. Repayment plans vary so discuss your budget with the loan company to ensure your payment plan fits your needs. Some plans will even allow you to pay interest only payments at first while you work up to paying more on the principal balance each year.
  
  

Stop Calls

• One of the first principle benefits of consolidating your bills you will notice is no more debt collector calls. Consolidating give you the freedom to answer your phone without worrying about who is going to be asking for your money. All your debts actually get paid by the consolidation loan and in return you only have one loan from the consolidation company.
  
  

Improve Credit Rating

• The key principle in a consolidation is that your debts get paid and you get one single new loan. This process will automatically increase your credit rating. Also, because you ensured the new loan payment is within your budget and will be making your payments on time each month, your credit rating will go up even more.