Being in debt is no picnic. You might find yourself staying up late at night, worrying about whether or not you’ll be able to pay your bills. Or, you might be dealing with calls from collectors or credit card companies that you wish would stop. While people find themselves in debt for a number of reasons, there is always a way out, from debt management to consolidation. If you are considering your options, these tips for debt consolidation can help you determine if it’s the option for you and help you decide the best course of action.

Tally Up Your Debt

Before you start exploring your options, it’s a good idea to take a look at the debts you have. Tips for debt consolidation depend in part on the size (dollar amount) and type of your debt. For example, if you have a balance on several credit cards, each with a very high interest rate, your options will usually be different than if you have a number of private student loans or a mortgage and some personal loans.

Talk to a Counselor

Once you have an idea of how much debt you have and the type of debts, discussing your options with a non-profit credit counselor is a good next step. It may be that you don’t need to consolidate your debt, but instead need to get a better understanding of what you earn and what you spend each month. A counselor will work with you to help weigh the pros and cons of each decision you might make.

Consider Your Options

If you do decide that consolidating your debts is the right path to take, the next step is to look at your various options. In the case of a lot of credit card debt, it might make sense to open a new card with a low interest rate, and transfer your existing balances to the new card. While transferring your credit card balances can be an ideal solution, the Consumer Financial Protection Bureau warns that there are some risks. The new card might charge high fees for the transfers, or the low interest rate might expire before you successfully pay off the debt. Read the fine print closely before you open a new account.

Another option is to apply for a debt consolidation loan. Debt consolidation loans come in several shapes and sizes. You can get a personal loan, which you use for any type of debt, or you can get a consolidation loan specifically for student loans. These loans typically offer a lower interest rate and a lower monthly payment, but you usually end up paying more in interest over a longer period. In most cases, this type of loan makes sense if you are struggling to pay all of your debts each month and require a lower payment amount.

Debt management isn’t the same as consolidation, but it might be a suitable option for you. Instead of applying for a new loan or credit card, you work with your creditors and a counseling company to come up with a monthly payment plan. Some creditors will waive fees, offer lower interest rates, or extend the amount of time you have to pay. You then pay the counseling company managing the plan, and the company distributes your payments to your creditors.

Before you make any decision about your debts, it helps to have the full picture. Weigh the pros and cons of each of your options and choose the one that will help you get out of debt without too much pain.

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