How to Manage Debt through Debt Consolidation

Before we start, let's define the meaning of the word "consolidation". I define consolidation as "to put together as one". Having a lot of debt from different people or different organizations can increasingly become unmanageable therefore making those debts earn more interest due to late payments and increasing your debt even more. This is where debt consolidation comes into place, you can do this with a professional or by yourself. This article is about how to deal with debt through debt consolidation by yourself.

Debt Consolidation To The Rescue

An effective way to manage debt is to have as few debts as possible. So instead of having debt from say... 5 different people, maybe you can have it in one big chunk which you can pay on a timely manner and remember easily. It might also be helpful to keep a list of all the people and organizations you are indebted to and cross them out accordingly once you've made a complete payment of that debt.

There are several ways you can do debt consolidation and here I list a few things that I was able to think about.

A loan from a friend or family - You can swallow your pride and ask a friend or relative for help.  There are certain risks like damaging a once good relationship but if you're sure that the other person would understand then it might be worth the shot. If you're interested on this leverage to start a business, you can read my article on asking a relative or friend for business financing.

Salary or Cash Advance - If you think that your next payroll salary would be enough to cover for you debts. However, you get broke on the next payroll period so I don't really recommend this unless you can save enough for another payroll period.

Personal or Salary Loan - If you have a good credit standing, you could apply for a personal or salary loan for this purpose. I'm not sure how willing banks would be to lend for this purpose but it might be worth the shot? Being able to avail of a Salary Loan might earn you a good credit standing in the future and you can leverage it to start a business in the future. You can read my article on Business financing through salary loan if you're interested on this topic.

To summarize, debt consolidation helps simplify things. I figured out during the past few weeks that debt problem is usually a psychological problem than money problem. We are overwhelmed by all the details that our brain have to deal with so the best cure is to simply, simplify things.