Steps to successful debt consolidation

Successful debt consolidation is completely dependent on using the correct steps to identify and eliminate your debt load by consolidating it under one head before paying it off over time.  The first of these steps involves identifying what your debt load. Open those bills and statement and take in those number. If you have a mortgage, how much of your total debt does it represent? If it stands at 25%, it's fine. If a majority of your debt is consumer debt though, you have a problem. Also, how much is owed to friends and family and how much to creditors? Which has the highest interest rates? How much interest will you pay back over time? Figure these important questions out first.

The next step is to create a budget. Understand how much you need to maintain a decent lifestyle and then how much you need over and above that. Cut back on some unnecessary spending, like eating out and overly socializing. Once you've arrived at a compromise budget, apply for a debt consolidation loan. Make that appointment, hand over the documents requested and try and restructure your debt. If you have high interest unsecured debt (such as consumer or credit card debt) try and convert it into secured debt (such as a mortgage). This way, you will pay less by way of interest since the bank has security against the debt. 

Once that is done, stick to the plan and aggressively pay off your debt. Your lender might decide which loans get paid off first, but if some loan is causing you greater emotional stress (such as debt from a friend that has strained relations), pay those off first. Pay all of your debt off in a timely manner and once you're done stay debt free. Make payments as you would to a lender but now put it into savings or investments.  Don't overspend and don't try and keep up with the Jones'. It's a surefire way to fall further into the mire.

you may like to read another article how handle debt issues and debt management 101.