When you are in a financial crisis, you find yourself taking more loans and credits than you can actually pay for. This can be a huge problem when it comes to clearing all that dept. This kind of commitment to your income will leave you broke and living from paycheck to paycheck. Consolidation is the best way to deal with all your loans while making due at the same time, but if the process is declined you will have to find another way to deal with the issue

Below are 5 ways to consolidate your debts

Get someone to co-sign your consolidation plan with you

A poor credit score, low income and debt may cause you to disqualify for a debt consolidation loan.  If you fail to qualify for the loan, you are allowed to co-sign with a friend, spouse or family member. You should look for someone with a good credit score and a great credit history to increase your chances for approval.  Co-signing is approved by most loan lenders. Your bank will look into all the financial details of your co-signer including the salary; loan payments and credit details before they approve any loan requests.  Getting a co-signer for your consolidation plan is not easy; when you fail to make the payments on time the lender will impose all the penalties on your co-signer.

Transfer the debt to your mortgage

Most people are commonly known to add their credit loan debts to their mortgage payments. This is common when the mortgage rates and house prices increase. This is one of the best ways to deal with your credit debts, especially when you own a home. Lack of equity will mean that this method may not work well for you.  Transferring the loan makes it easier and gives you a chance to treat the loan like a second mortgage. This will also make your monthly commitments less confusing since you will make the payments towards one account.

Create a budget for everything

Creating a budget will help you to reduce the number of debts and learn how to use your income and finances well.  One of the main causes of excess debt is mismanagement of personal funds.  For most people, making loan payment plans and bill deadlines is not a necessity. If you do this, you will end up with excessive debt, unpaid loans and multiple credits. If you live by spending all the money you earn, you will find yourself spending most of your income on unnecessary things. 

If this goes on, you will have to take on more credit to repay your existing loans and this can land you in a dangerous debt cycle. Before you spend any of your income, ensure you calculate all your needs first and put aside money for important loan payments. The disposable income should be geared towards clearing your loans rather than spending it on luxuries.

Attend a credit counselling programme

Most credit counselling programmes are for people with high debt, multiple credit cards, late loan payments and general financial instability.  The programme will help you create stability in your financial life and figure out how to clear all the debt payments. The counsellor helps you come up with a debt management plan by balancing all your finances and creating a budget