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Step 1
Read the conditions of your loan very carefully so that you understand all the terms and conditions, ie your rights and responsibilities. Keep in mind that being granted loan consolidation is a privilege that not all debtors have.
The way you keep your new loan agreement is to make all of your payments in full and on time. If you fail to do this, you have to go back to square one, and deal with multiple creditors again. -
Step 2
Usually when you apply and are approved for a consolidated loan, you must meet with a debt counselor to discuss how much you can afford to pay ever month. Since your monthly payment is based on your ability to pay, have faith that you can keep to the agreement.
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Step 3
Make a tight household budget to save money. Start by making a list of all the payments you have to make each month. Utility bills, food (about $30 per person per month), gas (if you have to commute to work), and school tuition.
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Step 4
Next, cut out the things you can live without. See where you can make replacements. For example, a costly gym membership can be replaced with exercising at home and outdoors. Instead of driving to make short trips around town, take the bus, walk, or bike. Resist the urge to do any "therapeutic shopping" by avoiding malls and department stores.
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Step 5
Stop using credit cards to pay for things. If you can't afford to buy something outright from the money in your savings and checking, then you can't afford it.
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Step 6
If you have teenage children, don't give in to requests for expensive new clothes, shoes, luxuries, or vehicles. While you pay down your debt, they will have to get jobs if they want more than the basics. This will also teach them about money management, and hopefully they will learn to avoid the cycle of debt.
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Step 7
If have an emergency or drastic change in circumstances, talk to your loan officer before you default on your debt consolidation loan. They can work with your to restructure the payments and make changes if necessary.
