When deciding on college debt consolidation, you must consider what types of loans you have in the first place.  If you have government loans, then you have to go through the federal government in order to consolidate them.  In this scenario, all of your government loans are combined into one and, in rare cases, the government may actually lower the fees that you are required to pay if you qualify.  If you have loans through private institutions, then you will need to contact an outside, debt consolidation specialist.  Whatever you do, do not attempt to merge federal loans with ones you received through private institutions.  Doing so might inadvertently invalidate you from certain government bonuses.

Although college debt consolidation might seem like the ideal option, there are still certain things that you need to know.  For one thing, do not simply jump at the first offer.  You need to find the best interest rate that you can before you agree to any terms.  If you do not, you may end up paying even more than you are now.  Also, consolidation increases your credit score but it can be very difficult to qualify for.  So, examine everything about your case and talk to professionals.  When you sit down with these professionals, do not pay any upfront, out of pocket fee.  Debt consolidation is free.  Don’t give your social security number or any kind of identification information to a consolidation company as this is well beyond the scope of what they need to know to help.

The cost of tuition more than doubles should you chose an Ivy League education.  As well, when you factor in room and board as well as miscellaneous costs such as books, transportation, and laptops, a graduate, may not be finished paying for a college education until the age of 40.  College debt consolidation makes this more manageable, so that you can spend less time worrying about signing dozens of checks and more time improving your life.

The first step is getting the interest rates on your credit card bills renegotiated with the creditors.  If you use a credit debt consolidation company, they can negotiate for you. Your creditors or collection agencies (depending on how deep in debt you are) will restructure the payment schedules to help you manage your debt.   Then the consolidation company will outline a repayment plan with your creditors. Many consolidation programs will create a single monthly payment for you.  This payment is made to the consolidation company so they can insure your payments get paid, the amount is easy to remember and all of it is going toward your debt. The company then divides and disburses the funds to your creditors.

As part of this agreement with your creditors, the credit debt consolidation company often negotiates a reduction in late fees.  When you default on a debt, your creditors charge late fees.  These can pile up quickly. By reducing or eliminating these, the consolidation company can greatly reduce the final amount you owe.  As you begin to get out of debt you may find you can pay a bit more on your consolidation payment.  They will then in turn pay more than just the minimum on your credit card payments, further reducing the principle and your final payoff amount.  Probably the best part about working with a debt consolidation company is it will end all the collection calls.

With a credit debt consolidation you can be debt free in as soon as four years, rather than the twenty years it takes the average person to clear their debt.

Although debt consolidation can seem like a great idea, in some cases it can worsen your debt. Many people assume that by consolidating all their debt into one loan, they will have lower monthly payments, lower interest, and even a lower debt amount. However, not all of this is true! As we stated before, in some cases your minimum monthly payment will decrease, but this is only because your payments are being stretched out over a longer period of time. This does not mean you owe any less money than you did before! There are many cases where people consolidated their debt with good hopes and only ended up in even more debt. Don’t let this be you, know the facts!

Overall, debt consolidation will either make you or break you. If paying off only one monthly payment rather than a few more is enough to relieve some of your stress and put your mind at ease, then this could be great for you. You could easily get back on track and keep up with your payments and relieve yourself of your debt. However, if you are just looking for an easy way to get you out of debt quick, this may not be the best idea for you, as you could end up in even more debt. The choice is yours, so make sure you make a well, thought-through decision before following through with debt consolidation.

• Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest …
  en.wikipedia.org/wiki/Debt_consolidation
• To combine all several financial liabilities into one loan.
  investor.infospaceinc.com/glossary.cfm
• A strategy sometimes used by consumers to better manage their debt problems. Rather than paying off several separate bills each month, a consumer consolidates his or her debts with a financial institution that will arrange for one lower monthly payment extending over a period of time.
  www.your-financial-advisor.com/terms.htm
• Rolling short-term debt into a home mortgage loan, either at the time of home purchase or later. Debt Service: The total amount of credit card, auto, mortgage or other debt upon which you must pay.
  www.multilinemortgage.com/terms_definitions/Terms_Definitions.htm
• Debt consolidation is the replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It can also be called a consolidation loan.
  www.iva.co.uk/debt_iva_info_uk_glossary.asp
• This is the process of taking out a new loan, usually at a lower interest rate, to pay off outstanding consumer debt such as student loans, credit …
  www.personalhomeloanmortgages.com/mortgage_glossary.asp
• When a number of debts are restructured into one monthly payment ideally at a lower monthly payment then the sum of the previous payments. Debt Consolidation can be achieved a number of ways including through a loan, a re-mortgage, a debt consolidation plan, bankruptcy, or an IVA.
  www.iva.net/glossary.html
• Used to manage debt, a strategy in which a borrower takes out a loan to pay off others. The borrower may then have one lower monthly payment that extends over time.
  www.beneficial.com/learn-about-loans/help/additional_resources/glossary.html
• Consolidation measure that must be carried out when the consolidated financial statements are prepared. Here not only the items shown in the balance sheet but all intragroup accounts receivable and payable must be taken into consideration.
  www.ir.airberlin.com/glossar.php
• Using the proceeds of a new loan to pay off one or more existing loans. Usually done when the client has trouble meeting their existing obligations and is able to lower their monthly payment with another more favorable loan.
  www.asbonline.com/customerservice/glossary.asp
• A very popular use of a home equity loan where members move high-rate credit card balances to low rate home equity loans. By taking a credit card with an 18% interest rate and moving it to a home equity line with an 8 or 9% interest rate, a member could save thousands of dollars.
  www.americu.org/he/HE_glossary.cfm
• Gathering all long-term debts and rolling them all into a home mortgage loan or refinance.
  www.mortgages-only.com/glossary.htm
• A very popular method of settling debts, whereby the debtor takes up a debt consolidation loan or mortgage to settle the debts combined into one.
  www.e-debt-consolidation.co.uk/glossary.html
• for mortgage purposes, it’s the paying off of some or all of a person’s consumer debt with the equity in their home. This can be accomplished by refinancing someone’s first mortgage or by giving them a separate second mortgage.
  www.themortgagearrangers.com/page.asp

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