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Solving problems on how to pay off loans makes it difficult when source of income could not keep up with it.  There’s practically no solution other than giving up some necessities just to be up to date with payments.  Then, the most the difficult part is deciding which ones to give up and which ones to retain.  It is hard to set priorities when many seem to be as important as the others.

The light at the end of the tunnel, so to speak, could be what are called as debt consolidation loans.  It is a loan that could pay off all existing debts and payments to the consolidated loan will be significantly lower, both in amount and interest rates.

What to do

Talk to current creditors more importantly for house mortgage payments, credit cards and car mortgage payments.  Inquire how much the entire loan balance would be if paid off in lump sum.  Ask for maximum rebate or discount.  The aggregate total of all the loans to be paid off should be the amount that a debt consolidation loan will loan out to pay them off.

Under normal situations, the consolidation loan outfit will directly pay the creditors.  This is to make sure the proceeds of the loan settles all the debts of the borrowers.

What to avoid

As the debt consolidation loans are for making debt payments lighter and more convenient, avoid taking out other loans.  Inquire from the loan consolidation outfit regarding the future use and charges on credit cards.  They should be able to give a guideline on how to use the credit cards without adversely affecting the consolidated loan payments you are making.

There is no point in owing more than what you can pay.  Doing will lead to far worse financial problems and even bankruptcy in the long run.