By Jakob Jelling
www.cashbazar.com

As most of us know, racking up debts is easy to do but getting out of debt is much harder. Getting a small loan here and there, using a credit card or two is easy to do and doesn't seem like a lot of debt to be adding to your current debt load. Even the bills may seem small, however, a having a lot of small minimum payments to make each month can make the difference between being able to repay your debts and beginning to have credit problems.

Finding an effective debt solution can be difficult to do. There are many companies and options out there to be had but not all of the choices are good for you. The key to knowing which companies offer a valid service and which companies only want your money is to research what they offer before contacting them for assistance.

The simplest and most common type of debt solution is a debt consolidation loan. A debt consolidation loan is a loan that will repay all of your debts and allows you to only make one payment per month. Almost every single lender will offer some type of debt consolidation loan but there are a few things to be aware of.

When considering a debt consolidation loan you must read the fine print and ask some questions. Will the interest rate on your new loan be lower than on your existing debts? Will the amount you are repaying pay down the principal of the loan aggressively? Will the amount of interest being repaid exceed the amount of the loan? Can this company work with your creditors to reduce the amount owed?

Another option to consider is a line of credit, possibly a home equity line of credit. A home equity line of credit or loan is a loan based upon the amount of equity that you have in your home. Since the loan or line of credit is secured with your home, the interest rate will be much lower than on any other type of loan. This may well be the best option available to you for resolving debt problems.

Another solution, if your employer is willing to work with you, is to borrow from your 401K plan. With the money withdrawn you can repay all of your debts thus leaving you free to get ahead again. Of course you will not wish to impact your retirement plans, nor will you wish to pay the tax on the money withdrawn. If you arrange to make one monthly repayment into your 401K plan then you can receive the money tax-free thus leaving you with essentially one small monthly repayment instead of all the bills that you had before.

Another option to consider is a Credit Union or debt consolidator. Many Credit Unions offer a bill repayment service if your paycheck is directly deposited into your account. They will hold your pay for 1 business day and automatically make your bill payments for you thus ensuring that you do not fall behind in your payments. They may also be able to work with your creditors to reduce the amount owed or the amount of interest being paid.

As you can see there are many good debt solutions available to you depending upon your circumstances. The biggest key is to acknowledge the problem before it is too late, research your options and act decisively.

About the author Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.