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If you are starting to struggle keeping up with your monthly bills, possibly because you have a large number of accounts to repay, or possibly because your income is now not covering 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 derive great benefit from a debt consolidation loan. Not only will you save money from a lower interest rate, you will now only have one loan repayment to make which makes it all so much easier to manage your finances.

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 pay off a credit card debt of £5,000 by just paying the minimum monthly requirement.

So, you have decided that consolidating your debts is the way to go. What you need 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.

Having done all that and you know how much you need to consolidate all your debts, the next thing to do is apply for the loan.

If you need less than £15,000 and have a good credit record, you might be able to apply to your bank. However. if you are already behind with some payments, then you will probably need to look for a company that specialises in debt consolidation loans, as they usually cater for people with a poor credit history.

When you are offered a loan you may find that you are not able to borrow 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 it is a high interest rate, you may possibly 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 cleared.

If you do need 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 bad credit loans available.

- Mark Dawson