Simply put, debt consolidation is a debt reduction system that allows you to combine your assorted unsecured debts into asingle payment. Instead of sending out payments on six or seven bank and store credit cards, you easily make one payment to the debt consolidation company and that company would then send the funds for you. This money management system can be highly advantageous to the consumer, as the debt consolidation company generally negotiates a reduced interest rate, a reduced balance, a lower monthly payment and eliminates late fees.

The best part is you are given a set time period when the debt will be paid off in full. Mortgage loans and car loans are not subject to consolidation since these are secured. Unsecured loans like bank credit cards affiliated with Visa and MasterCard and assorted department store credit cards are the typical items you will put in a debt consolidation program.

Should debt consolidation be preferred to bankruptcy?

Creditors view debt consolidation in a better light than bankruptcy. This is because debt consolidation shows the consumer's willingness to put forth a strong, good faith effort to take responsibility and pay for his debt; in contrast, when debtors file for bankruptcy, they opt to erase debt or pay little back, leaving creditors holding the bag. Although bankruptcy allows you to wipe out their debt and start fresh, it also destroys the your credit background. With debt consolidation, you are able to greatly reduce your debt, merge multiple payments into one payment, and preserve your credit background by avoiding bankruptcy.

There are ways and means of going about debt consolidation, such as contacting debt consolidation companies and applying for debt consolidation loans. The Internet also lists many companies that are willing to help consumers begin the debt elimination process.

Where to get a debt consolidation loan?

Run a search on Google.com for "debt consolidation loans", you'll find alot is available.