Before a decision is made concerning your finances, it's imperative that all options are thoroughly investigated in order to make a solid decision concerning financial debt management. Obviously, you don't want to further your debt by agreeing to something you don't fully comprehend.

First of all, you need to decide which type of loan you need and should it be a secured loan, or an unsecured loan. With a secured loan as a primary asset, and valuable, entitles you to a home mortgage, or a car loan, the creditor can use these properties as collateral, in the event that you are unable to repay your debt, which is called a default. If this should happen, then the lender can legally foreclose on your home or reposes the car. An unsecured loan, uses the credit from the borrower, to support the loan. Also with a secured loan having collateral as an asset enables companies to offer you lower interest rates, and if so, is the risk of lower rates worth the possibility of losing your house or, your car?

Now the next thing is to decide if you want to:

1. get a consolidation loan with a bank or finance company,
2. take out a second mortgage or
3. take advantage of credit card offers.

If you want a consolidation loan then searching for a bank is your best avenue [source: Way]. Also if you have an account already with a bank, this enhances your ability to qualify for a lower interest rate which can lower your payments. However, in viewing the credit scores, and yours are low, this shows how credible your payments have been paid in the past. As a result due to the payment history, banks won't lend, so this is why people who have such a debt burden turn to finance companies.

Typically, finance companies offer loans to businesses or individuals, and they can take more risks in lending money, to those who have low credit scores. In return, finance companies charge high interest rates because of that risk. Also there are non profit companies that offer debt management, they will provide counseling and a debt consolidation loan. Keep in mind that non profit doesn't mean there won't be fees for their services.

A home equity loan is a secured loan meaning the possibility of a second mortgage, and the home as collateral. The one drawback is that you could lose it if payments were not up to date. Despite this, a home equity loan has advantages such as you can deduct the interest payments on your taxes. You can also get a fixed interest rate as opposed to a variable rate which could rise at any time.

Credit card companies are an option for debt consolidation also. Many credit card companies are advertising 0% balance transfer fees, which means old debt can be rolled into, and no extra charge. People have been paying off debts by going from one low rate introductory offer to the next.By moving accounts around, it would be wise if you in closing accounts ask the company to report the account as closed so that you don't hurt your credit score [source: Dunleavey]. On the other hand you can keep those accounts open and not use them so that it improves your debt to credit ratio.

In the case of student loans below are some new options and rules that can help in consolidation of those loans.