If you have counted up your debt recently and are starting to panic, you must breathe and be careful you don’t make any rushed decisions. It’s easy to become overwhelmed with the fears of ‘what if?’ However when it comes down to deciding which personal loan to take out, it’s good to do so on a clear mind. 
So if you are feeling edgy, wait until tomorrow to start doing your research about which loans are available to you. This is because when people are looking to consolidate their debt, they often fall into common pitfalls that make the debt even bigger then when they started. You do not want that to happen. First of all, you want to make sure you get the best deal for your situation and needs so shopping around for good rates and features is a brilliant place to start. 
Debt Consolidation Traps
When you are weighing up various loans you need to think about the interest rates rather than considering the lengths or repayment. If you go with the shorter term loan you may struggle to pay off the larger amounts every month. Alternatively, if you stretch it out and make smaller monthly payments you will find the interest topping up nicely. This is why the determining factor should be the interest rates as this will make the biggest difference to the total amount you actually end up paying off. 
On top of this, here are some other pitfalls you must avoid to ensure you pay off your debts as quickly and as smoothly as possible: 
1) If you see an extremely low monthly rate when looking at debt consolidation loans, take a second to think about it. If you are amazed by the payment amounts you may want to think twice and look further into the application costs and any additional fees that will increase the total overall. 
2) On occasions, people consolidate every single debt they have which may include the low interest rate debts such as student loans. This is where you need to be careful you don’t end up opting with a low interest credit card which means you end up with higher rates of interest purely because you have chosen the convenience of merging all your payment into one. Even though some people think that combining debts may seem more manageable, in reality it doesn’t always work out especially if you ignore the interest rate. So always pay off the low interest debts on their own and focus on the high ones first. Once those are out the way you will feel a lot lighter and have less on your mind. 
3) Sadly, some people make the mistake of falling for online scams when searching for debt consolidation loans. Just like with anything, in the digital world there are lots of scammers poaching on those looking for a good deal. It’s important that you only go with someone you trust and know has a good reputation. Whether this means doing a thorough background search yourself or going to the Department of Banking to ensure they are a registered lender will be well worth it. 
4) Not paying off those minimum payments on each of your cards is another trap that befalls many. So don’t forget the smaller amounts. It’s good to remember it can take anywhere between one and two weeks for the money to go through.  This means you want to get the payment in on time so that you don’t end up accumulating even more charges. 
5) Another mistake people make is using their cards again after paying everything off. When you consolidate your debt it can often feel like a weight has been lifted off your shoulders. The phone calls stop and you no longer get any letters which seems like a great relief. However, many people fall back into the routine of spending on their once seriously overdrawn credit cards. This will put you right back where you came from and next time it may not be as easy to recover from. So always think that you have a clean slate and not to spoil it by repeating old habits. This is a chance to start anew and ensure you don’t keep overspending.

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