When you’ve determined that consolidating all your outstanding debts into one simple monthly obligation, you are left with the task of determining how to go about choosing the right approach. The fact is you have several debt consolidation options that are worth consideration, each of them with advantages and drawbacks. Here are several of the most common options when it comes to consolidating debt.

If you are among the lucky people who have relatives or friends who are well-to-do, you may be able to consolidate debt quickly and with relatively little red tape. Loved ones are more likely to lend you money to consolidate debt at either no interest or a very low rate of interest applied to the balance annually. While this is certainly to your advantage, there are a couple of potential liabilities associated with borrowing money from people you care about. The obvious one is that a failure to pay back according to terms could permanently color the relationship, costing you the respect and affection that the lender once held for you. At the same time, you may find the lender calling upon you to help them with a wide variety of little things at the most inconvenient times, since he or she did help you in your hour of need.

Other than choosing to consolidate debt with a loan from a loved one, you can also go with one of the most common debt consolidation options – getting a loan from your bank. If you are not behind on your current obligations and have a good relationship with the bank, there is a good chance you can obtain the loan at a reasonable rate of interest. Your banker may also be amenable to structuring the loan so that the monthly installment payment is very comfortable for your budget. However, if your credit is already taking a hit due to late or missed payments on one or more of your cards, you may not be able to obtain the best interest rate.

Debt consolidation programs through a finance company is also one of the more popular debt consolidation options available today. While the interest rates are a little higher, people with less than perfect credit stand a good chance of being accepted into a program and still participate in a plan that includes manageable monthly installments. Many of these companies also include some debt and budget counseling as part of the debt consolidation program, which may help you avoid repeating past financial mistakes.

It is important to note that your debt consolidation options are not limited to local banks and finance companies any longer. Thanks to the Internet, there are a number of reputable online debt consolidation agencies to choose from. However, be aware there are also plenty of online lending scams out there as well. For this reason, it is a good idea to thoroughly investigate any online debt consolidation options and their providers before attempting to do business with any lender you find online. Check for information on consumer information sites, as well as with local and national business bureaus. This will often help you identify the legitimate lenders as well as keep you from getting involved with any lender who has a reputation for being less than honest.