It is a fact of life that most ordinary Americans are suffering from credit card debts in one way or another. In fact, according to statistics, the average individual owes as much as $10,000 to three or more companies at one time. For some who are wallowing in debt, this kind of situation could be worsened by uncontrolled spending and worse, no clear debt management plan. Thus, they find themselves trapped in endless debt payments with no end in sight.

If you are in this kind of situation, it is important that you take stock of the situation right away and start looking at the options available to you. Of these, probably the most popular option is availing of a credit card debt consolidation loan. Let us take a look at the basics.

What is a Debt Consolidation Loan?

Among others, a debt consolidation loan is a personal loan that enables an individual to consolidate various debts into one. For instance, a credit card holder with three sets of debts to various companies might be dealing with these on an individual basis, something which is prone to disorganization and, therefore, missed payments. With a credit card debt consolidation loan, you can, with the help of a lending company, pay off these debts just once a month.

What are the Main Advantages of Getting a Debt Consolidation Loan?

First, obtaining a consolidated loan will result in lower interest rates and monthly payments because of the extended loan term. Availing of a loan from companies providing non-profit debt consolidation services, clients will also be given access to free financial counseling such as drawing up a debt management plan which will allow you to pay off all your debts in full over a certain period of time. Another advantage is that the entire payment process will be simplified because you will only have to pay once, thereby making it much more difficult to miss payments.

Who Should Get a Debt Consolidation Loan?

Nevertheless, this is an option that should be exercised with care because not all individuals can handle the responsibility of a credit card debt consolidation loan. You can avail of this loan if your credit card debts have really gone out of control (i.e., you cannot make even the minimum payments, the interest rates are crazy, and the principal balance is just way too high), when you have a steady income, from which you can make monthly payments. You also need to have discipline to go along with your debt management plan, otherwise, it will just fail.

Who Provides a Debt Consolidation Loan?

Two kinds of companies may provide such loans: traditional companies or those offering non-profit debt consolidation services. You can choose from wither kind of company as long as you think that the interest rates are reasonable, the company experts are easy to talk to, the company has a good track record, and their services really work. With their help, you can determine which loan package is right for you and help you take steps toward achieving a debt-free life.