It’s challenging to look at your budget and realize that debt has overtaken your life. And while you may feel like giving up, there’s plenty of time to get back on the right track. All you need is a plan, dedication, and persistence.

Debt consolidation can go a long way in helping you better manage your debt load, all while saving you money. But before you go down this path, there are a few questions you need to answer.

1. Which debts can you consolidate?

Some debts are easier to consolidate than others, so you need to create a list to work from. Here’s a simple example:

• Credit cards
• Home equity loan
• Car loans
• Mortgage

From the above, you may be able to use a personal loan to bring your home equity loan and credit card debt under the same roof.

2. What’s the impact of your debt on your finances?

In other words, how much money does it cost to keep up with your debt?

If this is the first time you’ve addressed this question, don’t be surprised if you don’t like what you see. It could be worse than expected.

On the plus side, it’s another step in the right direction. Knowing how your debt impacts your finances allows you to create a targeted plan that you’re comfortable following.

3. What are your options?

There is more than one way to consolidate debt. The approach that you take is based largely on the type and amount of debt that you’re dealing with.

For example, if you’re primarily concerned about your multiple credit cards – all with four figure balances – a balance transfer credit card is the best option.

But if you have various types of debt, you’re better off looking into something like a personal loan.

4. What are you hoping to accomplish?

Debt consolidation sounds like a great idea on the surface, but you have to dig deeper than that.

Are you trying to make your debt load more manageable? Are you seeking a way to save money every month? Are you hoping to lower your interest rate?

Go into the process with an idea of what you want to accomplish. This allows you to set realistic goals, while taking steps to reach them.

Final Thoughts on Debt Consolidation

If debt consolidation is on your mind, answer these questions along with any others that are important to you.

The more energy you focus on the process as a whole, the easier it becomes to incorporate a plan that you can follow and trust.

Do you have any experience with debt consolidation? What approach did you take? Were you happy with the end result?