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If done properly, debt consolidation can help people pay down their debts. Not everyone needs to seek help from a debt consolidation company. Many people have successfully managed their debt on their own. So if you are considering your options there are some important things you should know about consolidating your debt.

If you are going to pay down your debt, you are going to need to take some time and figure out what is best for you. You can make financially smart moves by letting the numbers do the talking.

KNOW WHAT YOU ARE PAYING NOW

By finding out what your current balances and interest rates are, you can use that information to make a financial plan. Plug those rates into an online calculator (such as bankrate.com 's debt pay-off calculator) and see how long you'll be paying off those debts if you do nothing more that what you are doing now. However you choose to consolidate your debts, just make sure that you will be doing better then when you started off.

KNOW YOUR OPTIONS

Some people choose not to employ the assistance of a third party. You should know that you can call up your creditors yourself and negotiate a lower interest rate. You can also check out other credit card companies to see if you qualify for a low interest balance transfer to another card. Or, contact your bank regarding a personal loan. If you find something that works for you at a lower interest rate you should use it to pay off your current debts. Others have successfully paid off their debts with a home equity loan. However you do it, you are trying to create lower payments and lower interest charges to make your debt more manageable. You can certainly do that yourself.

But, if you are in need of some professional assistance...

KNOW WHAT YOU ARE LOOKING FOR

... and what you should do once you find it. What you are trying to do is save yourself money and apply that savings to your debts. Be sure to ask the debt consolidation companies about their fees and make sure you completely understand their processes.

A debt consolidation loan is a loan which you turn around and apply to your existing debts. By adjusting the payment period or lowering the interest rate, you can pay less then what you would have been paying each month while still working toward eliminating your debt. Some people don't understand how paying less then what you already pay will get you out of a hole, but it can.

Say, for example, you have three $10,000 loans that currently have interest rates of 18%, 19% and 20%. With

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