The answer is that the success of debt consolidation largely depends on your personal circumstances and what money you owe and to whom, but the most important thing to consider with a consolidation deal is whether you will truly pay less over time.

While a single smaller payment each month can be a god send when it comes to your personal cash flow ? the longer term cost be a significantly higher total figure leaving your bank account.

Often overlooked is that as the lenders have access to your credit records, there is a higher than usual probability that you will not qualify for the preferential low interest rates advertised by these lenders ? particularly if you are clearly having debt problems. The fact is it's often hard for most people to qualify for these; they are an incentive to get you interested in the product.

The trouble with taking another loan out (in effect) in order to pay off existing debts is that those who don't own their own house can expect to pay a higher interest rate than consolidation companies advertise.

On the other hand, those who use their house as equity to get more credit face losing their home if they default on their repayments. It is important to remember that no matter what size the debt, credit card companies cannot take your house.

Consolidation loans do offer benefits, however; whereas credit companies are designed to keep you paying through a revolving credit payment plan where interest rates guarantee you will on average pay back between 5 and 6 times your original borrowing, consolidation loans do away with finance charges from your bill every month and usually lower interest rates on the original amount.

The key is still to work out whether you are in fact paying more over time and to figure out what happens if you default on this new loan. As with all credit matters do your maths beforehand, get to know the small print and understand the implications before you sign on the dotted line - for example, you don't want to sign your house away when it's not already under threat.

Think of the problem in the long term rather than just reaching for short-term solutions. From here you can make a sensible decision as to whether this sort of loan suits your needs.