The ever worsening economic situation can sap the energies of even the most energetic of the people. There are mounting debts and apparently no solution in sight. The expenses have to be made. But, with the income levels dwindling and the job opportunities simply not being there, what can one do?

It is not as if the expenditure is going down. It is not. In fact, it goes up as the chances of more and more family members being out of job goes up. So, is the threat of bankruptcy since it becomes clear, after some point in time that one cannot possibly repay all the different loans that one has taken on.

So, what is to be done? One cannot take any more personal loans . One can take a payday loan but that comes at a real high cost.

The typical way out is debt consolidation.

What is debt consolidation? Let us say that you have five different debts demanding five different payments to be made. Each of these five could be at a different level of interest rate. And, quite likely, each of these five could be at a much higher interest rate because of the tier system which is in place which offers lower interest rates for higher amounts borrowed and higher interest rates for any lower amount borrowed.

Debt consolidation simply pools together all the debts to be paid and makes one big bundle and goes and gets a loan at a much lower interest rate, with which it repays the higher interest rate debts, thereby saving dramatically on the repayments.