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It’s no secret that Americans like to use credit cards. In fact, any given household in the country likely has over $16,000 in credit card debt alone, and likely up to $132,000 in mortgage debt. And it’s not hard to see why: Credit cards allow cardholders to effortlessly use up their entire allowed balance in the blink of an eye, and that balance becomes very hard to pay off later.

When you have lots of accumulated debt from a variety of different sources, there is one light in the seemingly insurmountable darkness: debt consolidation.

Although the process can seem confusing at first, debt consolidation is actually quite straightforward. Simply put, you borrow enough money to pay back all of your debt. You’ll still owe the same principal amount, but your new loan will have a lower interest rate, meaning you’ll still pay less over the same period of time, saving thousands.

Know How Much You Need

Remember why you’re taking out the loan in the first place; debt consolidation seeks to reduce the burden of existing debt, not add to it. Therefore, it’s a good idea to limit what you borrow to the amount you owe across each creditor. If you other pressing emergencies, borrowing a little extra can provide you with some breathing room, but be sure to have a plan of action to repay your single debt.

Repayment Period

Depending on the debt consolidation company you opt for, you’ll have your choice of different repayment periods. For example, you may be able to choose to pay off all your debt in a 36-month period, or you can spread out the monthly payments as long as 84 months. Ultimately, it comes down to how much you’re willing to spend on a month-to-month basis.

Beware of Fees

Another difference that pops up when choosing your debt consolidation company is the fact that some will charge additional fees for their services. This is a small percentage that goes to the company for taking care of the consolidation, and you’ll usually pay up to 5 percent of the total amount borrowed. In some cases, a company may also charge a fee if you’re able to pay off the loan earlier than agreed upon; be sure to ask about this and avoid companies that require it.

Negotiate For a Good Rate

Although not strictly necessary depending on the interest rates of your current debt, it’s a good idea to get an idea of how much a debt consolidation company will charge as your new interest rate. In most cases, it should be lower than the average rate of the old debt. Knowing the interest rate will also give you a good idea of what kind of rate you’d be able to get with your current credit score.

Apply for a Debt Consolidation Loan

Depending on the company, you can either apply online or over the phone, though most have fully-operational websites offering this ability. In most cases, the process itself only takes a few moments. If the website doesn’t allow online applications, you can also mail in a paper application. Of course, this will take much longer.

Regardless of how you apply, most companies will require a name, Social Security number, address, information about housing debt, guaranteed monthly income, and the total loan amount requested. No additional information should be necessary.

Combine Your Debts

After approval comes consolidation, and the company usually takes care of that process on your behalf the same day it accepts your application.

Monthly Payments

The final step can seem the most daunting when you consider the total loan amount and how long you’ll spend paying it back. Just remember that you now have a single debt goal to achieve, and that this number represents all of it. To ensure you never miss a payment, it is a good idea to set up automatic bank withdrawals each month until the balance hits zero.

Enjoy Being Debt-Free

After you’ve made that final payment, congratulate yourself for staying committed to being debt-free! You’ve accomplished a tremendous journey and can start working on building a stronger credit history.