Beware of counselors or "debt management services" that may make promises they cannot keep when considering an application. Some of these counseling services may charge higher interest rates than those already accruing in addition to charging service fees.

When you sign up for loan consolidation, the company will negotiate with each of your creditors on an individual basis to help lower your interest rate and stop fees from accruing. When the loan consolidation company and your creditor come to and settle on an amount, your interest rate will neither increase nor decrease, provided the creditor is paid on time. If you default though, be aware that the creditor has the right to resume collection proceedings.

The application process for debt consolidation loan services requires all monthly bills and income statements (And that means all of them). The amount of time for processing will depend on the method of application.

Some applications may be completed on a company website, while other companies handle the application process over the phone. It is vitally important to ensure the company is reputable before revealing any of your personal information. Reviews of these programs and companies are available online and by contacting the Better Business Bureau or Chamber of Commerce in the city where the company operates. These will help in the decision in selecting the right company to handle the debts.

Companies may offer a loan that they tout as having "no restrictions", but don't be taken in by such hype and always read the fine print before making any final decision. It is possible in some cases to borrow more than you owe - often a lot more than you owe - and have that additional amount added to the total of your loan.

A word of caution when considering additional loan: The idea is to get rid of the debt and an addition to the loan could exacerbate an already bad situation. The loan consolidation counselor may advise you to take a larger loan than you really need. If you really do not need the extra money then turn it down.

Reputable companies will have more than one plan to choose from, and by working with a loan consolidation counselor and discussing your situation openly and honestly, you will find the right options for you. Remember that until you agree to their terms and commit to them, they are a salespeople trying to win your business.