As a result of increasing interest rates and other economic changes, many of us are now turning to some means of borrowing in order to get our finances in order.

By combining existing debts into affordable loan schemes, borrowers can take some of the hassle out of having to juggle payments in order to make ends meet, whilst also attempting to improve their credit rating.

Debt consolidation has become one of the most popular methods of sorting out finances. By moving all loans and debts to one that involves a lower rate of interest and allows for affordable monthly payments over a longer period of time.

However, interest rates for such schemes tend to be higher than some other schemes. In the case of secured loans, the rate changes depending on changes in interest rates, so you could end up paying more one month should the market change.

Missed payments can lead to increases in interest, so your credit score is at risk if you can't keep up with the repayments - especially if you've taken out an unsecured loan.

Those with secured loans are at greater risk should they fall behind on payments, for because they've included their property as part of the debt, homes are at risk of repossession by the loan company should there be any complications with missed payments.

There are a number of debt consolidation organisations on the market (most of which we are familiar with due to their advertisements on daytime television)

These companies offer debt management services, giving borrowers the opportunity to get their finances organised whilst still being able to afford the necessary basics each month, such as food and clothing.

When applying for such schemes, monthly income and existing debt level is taken into account in the application process, from which a monthly payment plan is worked out depending on the information you provide, as well as negotiating interest rate reductions with lenders in order to get the most affordable deal.

For those looking into getting such a plan in order to sort out their debts, it is advisable not to rush into such plans.

For those seeking advice on debt management, it is advisable to first speak to the Citizens Advice Bureau (CAB) - who can offer useful advice on a range of debt-related subjects - from plans on how to prioritising debt to negotiations with lenders in order to reduce repayments.

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