How to Consolidate Monthly Bills Into One Payment

Have you found yourself under a mountain of bills? Are you concerned for your future and your mental health? Debt is an American epidemic, but there are ways to reduce and eliminate that pile of paper that seems to be smothering so many. The best method? Consolidate your bills and begin to pay them down.

Instructions

1

Calculate your outstanding balances and required minimum monthly payments. You're presumably paying minimums on all of your cards and bills (effectively stretching the repayment of each card to 20 years), so figure your monthly outgo based on all of your minimum payments. Make sure to figure in all of your ancillary bills (like electrical and cable) to get a full picture. What you're doing is establishing an idea of where you stand and where you'd like to be.

2

If your credit is below 500, you may have waited too long to consolidate and maintain a reputable score as you pay down debts. Bankruptcy or credit counseling may be your best bet, regardless of the effect on your credit. However, with a score above 500, you have a few options to consider before taking these drastic steps. Research cards, loans, lenders, and banks on the Internet and locally to find out what rates, payments and programs are available.

3

If it's available, and if you're willing, take out a secured line of credit against your home or property. This will be the cheapest (albeit long-term) solution. Some people may not want to secure unsecured debt, but this is the method for the lowest possible outgo. Apply at several institutions about which you've complied research, and speak to a loan representative to discuss your options. Contact a financial adviser and get advice regarding your personal situation. Make sure your adviser is close to you--your finances are not something to leave in the hands of someone you don't know--or, even more so, trust.

4

Review all approved applications for fees, payment plans, rates and terms. Make sure to review these documents with your adviser and, if possible, an attorney. There are many ways in which financial documents can be confusing, complicated and difficult to interpret. Never sign a loan without fully understanding the terms and structure to which you are obligating yourself. Pay special attention to the rate, and ensure you do not end up with a variable or adjustable rate unless you trust that you can manage a changing loan.

5

Sign the correct loan for you. Before signing, review all of your loans to be included in the new loan and ensure that your total monthly outgo will be reduced. You'll be putting yourself in a better long-term financial situation. Shoot for a short term (5 to 7 years) depending on your debt load, and make sure your ultimate goal is to become debt-free.