Dos and don’ts of consolidating your debt

You’ve probably heard all kinds of wives tales about debt consolidation. Some of them portray debt consolidation as the quickest way to deal with your debts. Other rumours paint a frightening picture of escalating debt that could lead to financial ruin.

The reality, of course, lies somewhere in-between. Consolidating your debt may or may not be the best way for you to get out of debt. It all depends on a variety of factors: not just how much debt you have, but how much money you make and what kind of debts you’re thinking about consolidating, as well as your attitude to debt and to money in general.

There are a few rules that apply to most people.

Take a look at these debt consolidation dos & don’ts.

DO

Do consider talking to a debt adviser if you’re thinking about consolidating your debts. You need someone who can help you examine your options, so make sure you talk to a professional that doesn’t just offer debt consolidation. Maybe you’d benefit from some budgeting advice so you can deal with your debts personally.

Make sure you think carefully about the repayment term for your consolidation loan, if you take one.

DON’T

Don’t continue struggling if you really can’t afford your debt repayments. If it’s obvious you need help, ask for it - your debt adviser will be able to help you decide whether you need a professional debt solution, and if so, which one.