Making more research into debt consolidation is important before choosing it as a financial solution. You need to make sure that you are in fact dealing with a reputable company that provides excellent debt management services.

Here are steps you can take to make debt consolidation work best for you.

1. Obtain a home equity loan or debt consolidation loans

A home equity loan or debt consolidation loans can provide you with the cash needed to pay off all of your outstanding debts. You can apply for a home equity loan if you have a property as collateral. Once you have used the proceeds to pay off your debts, you need to make prompt monthly payments to avoid losing your home.

2. Apply for a personal loan.

Applying for a personal loan is easy as long as you have a positive credit rating. Although this is still an unsecured loan and carries a higher interest rate, it is a good option for those who do not want to risk their homes. Those who have less than stellar credit rating may go for the bad credit consolidation loan instead.

3. Try cash-out refinancing

If you have an equity on your home you can try refinancing the property and using the amount to pay off the debt. One advantage to this is the low interest rates you need to pay on your refinanced loan.

4. Communicate with credit card companies.

If you have mounting credit card debts, you can try talking things out with your credit card provider. They may be willing, in fact, to reduce your debt and give you a more favorable interest rate.

The move means that it will maintain the size of stimulus spending programme, pumping in money to try to bolster the economy.

The Fed warned that the pace of recovery had slowed in recent months.

It also kept interest rates unchanged at between zero and 0.25%.

There had been speculation that it would signal it was restarting, or expanding, the “quantitative easing” (QE) scheme. Commentators dubbed this latest move “QE lite”.

Stock markets recovered some of their earlier losses after investors reacted positively but still cautiously to the news.

The Dow Jones index, down about 100 points before the Fed announcement, was only 15 points lower shortly afterwards. It closed down 54 to 10,644.

US government bond prices also rose.

There are fears among some, including former chairman of the US Federal Reserve, Alan Greenspan, that the US economy could be heading towards a double-dip recession.

Constraints on spending

The Fed had hoped to scale back the amount of money it put into the economy as it saw a recovery.

But as the pace of the early recovery has slowed, it will keep its $2.3 trillion (£1.45tn) balance sheet steady by reinvesting repayments on debt and mortgage-backed securities into Treasury bonds.

The crisis saw an unprecedented expansion in its balance sheet as in injected new money into the economy. Before then its balance sheet was about $800bn.

In a statement, the Fed said the pace of recovery had slowed in recent months and is likely to be “more modest in the near term than had been anticipated”.

“Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit,” the central bank said.

Some analysts say the move could mean that money can be borrowed cheaply for a longer period of time.

“The Fed’s investments in longer-dated Treasury debt should… lower mortgage and other borrowing rates,” Stephen Gallagher and Aneta Markowska from Societe Generale commented.

Others believe the Fed will have to take further steps in the coming months.

“The Fed is a step closer to reviving its [full QE] programme, but it will likely take somewhat slower growth to push it off the fence,” said Sal Guatieri, senior economist at BMO Capital Markets.

Figures from the US Labor Department also showed that US business productivity fell by an annual rate of 0.9% in the second quarter.

It was the first time since the fourth quarter of 2008 that output per worker had fallen, and comes after productivity had risen by 3.9% rate in the first quarter of this year.

‘Credit easing’

During the financial crisis the Federal Reserve introduced a number of new tools to inject new money into the economy.

Fed chairman Ben Bernanke dubbed the process “credit easing” as opposed to “quantitative easing” and divided the central bank’s policy tools into three main areas.

These were – lending to financial institutions, providing liquidity to key credit markets, and purchasing long-term Treasury securities.

Mr Bernanke has said the US approach differs from a straightforward QE regime, “where the focus of policy is the quantity of bank reserves” rather than targeting the mix of loans and securities held by the central bank.

The Dow Jones finished 265 points lower while European markets closed down 2%.

On Tuesday, the Fed said it would keep up its efforts to try to bolster the economy amid signs the recovery was weaker than expected.

Separately, data showed the US trade deficit rose to a 20-month high.

The Commerce Department said the deficit widened to $49.9bn (£31.9bn) in June, which surprised economists who were expecting a smaller trade gap.

The expansion of the gap to its widest level in almost two years reflected a rise in imports from China and a decline in exports.

Meanwhile, the Treasury Department said the US budget deficit – the difference between the government’s income and its spending – in the first 10 months of the fiscal year stands at $1.17 trillion, down from last year’s 10-month deficit of $1.27tn.

The Obama administration, however, still expects the deficit for the full year to surpass last year’s record imbalance of $1.42tn.

Steep falls

Earlier, Asian markets had set the tone for traders elsewhere by falling, with news that China’s industrial growth slowed further in July also hitting sentiment.

Japan’s Nikkei 225 index closed 2.7% lower at 9,293, while Hong Kong’s Hang Seng index shed 179 points to close at 21,294.

In Europe, leading share indexes in London, Paris and Frankfurt all closed down by more than 2%.

On Wall Street, the Dow Jones recorded its biggest loss in six weeks, falling 2.5% to 10,378, with all 30 components losing ground.

The Standard & Poor’s 500 also fell 2.8%, while the technology-based Nasdaq shed 3%.

Weakening dollar

The Fed’s assessment of the US economy also put more pressure on the dollar, which hit a 15-year low against the yen.

The US currency fell to 84.73 yen, the lowest level since 5 July 1995, before it later pulled back to stand at 85.36 yen.

But the pound weakened against the dollar after the Bank of England warned that the UK faced “a choppy recovery” and downgraded its growth forecasts.

Analysts said the Bank’s Inflation Report suggested that interest rates were likely to remain low for some time.

The Kimberley Process had suspended the diamond exports in November in response to allegations of atrocities committed by the military at Marange.

But last month, it ruled that abuses had ceased and said Zimbabwe could resume limited exports.

The diamonds from the Marange field could generate $1.7bn (£1.1bn) a year.

About 900,000 carats valued at about $72m were on sale on Wednesday, according to Abbey Chikane from the Kimberley Process.

A review of conditions at Marange will be carried out in September, after which Zimbabwe may be able to resume full exports.

‘Historic’

The Kimberley Process was set up in 2002 after the diamond trade was accused of fuelling several conflicts in Africa.

The BBC’s southern Africa correspondent Karen Allen said the credibility of the Kimberley Process had been at stake over the Marange diamond fields, with pressure to expel Zimbabwe from its certification scheme.

Questions had been raised about the competence of its own independent monitor, she said.

In opening the sale, Prime Minister Morgan Tsvangirai said: “Indeed it is historic in that we have managed to satisfy the minimum requirements of the Kimberley Process.

“We have put in place measures to ensure that we abide by the Kimberley Process principles and sell our diamonds in a transparent manner.”

Irene Petras, a human rights lawyer, told BBC World Service’s Focus on Africa programme she was disappointed that the sale had been allowed.

“What’s disappointing is that, although the sale’s going ahead, we still haven’t received any information about how human rights violations will be investigated and also how accountability will occur in terms of the sales of these diamonds,” she said.

And human rights groups expressed fears after President Mugabe urged the army to “jealously guard” the country’s natural resources in a speech on Tuesday.

The US National Highway Traffic and Safety Administration is looking into cases of “unintended acceleration”.

But in a briefing to Congress members, it said that data recorders of 58 cars involved in incidents suggested brakes had not been applied in 35 cases.

The NHTSA said it was drawing no conclusions from the findings.

In nine of the 58 cases, the brakes had been applied late, the note said, with both the brake and accelerator depressed in another incident.

But reviewing data recorders was only “one small part” of government efforts “to get to the bottom of unintended acceleration in Toyota vehicles,” said Transportation Department spokeswoman Olivia Alair.

“At this early stage period in the investigation, engineers have not identified any new safety defects,” Ms Alair said.

Toyota has recalled about 10 million vehicles globally in the past year for various problems including faulty floor mats, sticky accelerator pedals, braking software glitches and steering malfunctions.

Its reputation has come under fire, particularly in the US where it is facing hundreds of lawsuits.

Earlier this year it was fined $16m for not disclosing potentially dangerous defects, including the “sticky pedals”, to regulators.

The firm did not comment on the NHTSA briefing, but it has always maintained that its tests had found its acceleration systems were sound.

Factory output was up 13.4% from July 2009, but this was the fifth consecutive month the annual pace had slowed and the lowest rate of 2010.

Retail sales and factory investment also eased, the National Bureau of Statistics said.

It comes after Beijing has cut stimulus measures, closed inefficient factories and curbed bank lending.

“This tells us economic growth is continuing to slow,” said economist Zhu Jianfang of Citic Securities in Beijing.

“If they don’t make changes, the economy will see a danger of further sliding.”

Separate figures showed that Chinese inflation accelerated in July, as floods destroyed crops and disrupted transport routes, driving up food prices.

Inflation as measured by the consumer price index reached 3.3% last month compared with 2.9% in June, the National Bureau of Statistics said.

Import impact

Earlier this week, figures showed that China’s import growth had slowed in July, which economists had seen as a sign that the country’s rapid economic expansion was cooling.

However, exports rose by 38.1%, from June’s 35.2%, as China’s trade surplus increased.

There are worries that if China’s demand for imports slows it could hinder the global economic recovery.

Official figures out last month suggested that China’s economy grew at an annual pace of 11.9% in the first quarter of 2010, slowing to 10.3% between April and June.

Bharti suffered after a price war between 14 operators led to rates being slashed.

It reported a net profit of 16.82bn rupees ($361m; £230m), down from 24.75bn rupees a year earlier.

But Bharti’s chief executive in India said there were “encouraging” signs that the price battle was stabilising.

“I’d say the worst is over. Cutting rates further would be suicidal” added Sanjay Kapoor.

African model

Bharti’s average revenue per user – the industry’s key measure of profitability – slipped by 23% year-on-year.

The firm, which has more than 20% of the Indian market, also lost about 2.2bn rupees on unfavourable currency exchanges.

The fierce competition at home, as well as increasing market saturation, led Bharti to take a step into the emerging African market earlier this year – paying $10.7bn for the African mobile operations of Kuwait-based Zain.

Analysts say the firm, which was a pioneer for low-cost telecoms in India, will have to slash Zain’s high cost base, win subscribers and encourage them to talk more using cheaper tariffs.

Some severely hit areas have seen all crops wiped out and many livestock lost, according to the UN’s Food and Agriculture Organization (FAO).

About 700 000 hectares of crops are under water or destroyed, with many surviving animals without feed.

It said the upcoming wheat crop was now at risk.

This was “the bread basket” of the country, the group added.

“The consequences for the local populations’ food security are acute, as food prices have already started to rise sharply,” said David Doolan, the FAO’s head of programmes in Pakistan.

“Over 75% percent of the affected population depends on agriculture for their livelihoods.”

He added that the organisation’s immediate priority was to ensure that surviving livestock did not die.

An estimated 14 million people affected by the deluge, which is now inundating southern areas of the country,

The UN says that It says that so far about 1,600 people have been killed.

‘No global shortage’

Elsewhere, food supplies have been severely disrupted in China, pushing up prices where the country is battling with its worst flooding in a decade.

At the other extreme, Russia’s worst heatwave on record has parched crops.

Normally much of the wheat is destined for the global market but now there’s an export ban as the country’s grain output is cut – with prices having soared by more than 50% since June.

However the FAO says that fears of a new global food crisis – similar to that of three years ago – are not justified.

His comments came as the Bank lowered its economic growth forecast and said inflation would stay higher for longer than previously forecast.

The Bank now expects the economy to grow by less than 3% in 2011, down from its previous forecast of nearer 3.5%.

It added that a lack of bank lending would limit economic growth.

“It will take many years before bank balance sheets and fiscal positions return to anything like normal,” said Mr King.

“In the meantime they will act as headwinds to the recovery.”

Mr King also warned that following an “unprecedented” period the UK economy faced a difficult rebalancing “away from private and public consumption and towards net exports”, and that this could also hit economic growth.

He added that there were some factors helping to keep the economy expanding, most notably the continuing economic stimulus measures and the fall in value of the pound.

And although he said government spending plans were one of the reasons that the Bank had cut its growth forecast, he stressed that the chancellor’s cost-cutting plans also reduce the risk of a new crisis for the economy.

However, Mr King said it would be “several years” before the economy adjusts “back to anything we can call remotely normal”.

The Bank of England’s Quarterly Inflation Report forecasts a range of different outcomes for GDP growth, which it publishes in a graph, with the darker central projection considered the most likely.

The central projection in the latest graph shows that the Bank predicts growth somewhere between 2.5% and 3% next year, below its previous forecast, but above the Office for Budget Responsibility’s current estimate of 2.3%.

Jobless drop

Hugh Pym, BBC chief economics correspondent, said the City considered that Mr King was being too confident about future economic growth.

“He is still quite optimistic for next year in the view of the City of London,” said our correspondent.

The Bank’s report came after the latest official unemployment data showed a further fall in the jobless total.

The number of people unemployed in the UK fell by 49,000 to 2.46 million in the three months to June, according to the Office for National Statistics, the biggest drop for three years.

The Bank said the main factor behind its prediction that inflation would remain higher than previously forecast was the government’s decision to raise VAT to 20% from 17.5% at the start of next year.

The most recent official figures showed that Consumer Prices Index inflation stood at 3.2% in June, above the Bank’s target rate of 2%.

Retail Prices Index inflation, which includes housing costs, was higher still, at 5%.

Mr King stressed that inflation was likely to fall back below the Bank’s 2% target in 2012, as next year’s VAT rise drops out of the calculation.

As a result, interest rates are likely to remain very low for some time to come.
Double-dip?

The Bank’s warning that the UK faces a difficult economic recovery could increase fears of a double dip recession.

However, while Business Secretary Vince Cable spoke at the weekend about his concerns of the UK falling back into recession, the Bank’s own projections say this remains highly unlikely.

Energy Secretary Chris Huhne also ruled out the likelihood of a double dip recession.

“The reality is that it’s very unusual that there is a double-dip recession in economic history,” he told BBC Radio 4’s The World At One.

“And there are a lot of forces that are working to sustain the recovery.

“We’ve got good export growth. We’ve had a recent report on manufacturing. I’m delighted to say the government is really keen on manufacturing.”

The Bank of England’s report did little to improve investor sentiment, however, and the UK’s main share index, the FTSE 100, extended early Wednesday losses caused by concerns about the state of the US economy.

In line with other major markets, rattled by worries about the worsening outlook for the world’s biggest economy, the FTSE 100 index closed down 131.20 points, or 2.4%, at 5,245.21.

However, officials in Austria and Belgium have taken a positive view of the EU budget commissioner’s idea.

With its own income the EU would be “fairer”, Belgium’s Budget Minister Melchior Wathelet said.

Earlier, France’s Europe Minister Pierre Lellouche called the EU tax idea “perfectly ill-timed”. He said the EU ought to be planning cutbacks now.

The EU Budget Commissioner, Janusz Lewandowski, told the daily Financial Times Deutschland on Monday that he would present some options next month for direct EU taxes.

He said the burden on national budgets could be eased if the European Commission were able to levy direct taxes.

EU taxes on aviation, financial transactions and CO2 emission permits could be considered, he said.

Governments unimpressed

There were frosty reactions from the UK, France and Germany – all net contributors to the EU budget.

British treasury minister Lord Sassoon said the British government was “opposed to direct taxes financing the EU budget”.

He said: “The UK believes that taxation is a matter for member states to determine at a national level and would have a veto over any plans for such taxes.”

A spokeswoman for German Finance Minister Wolfgang Schaeuble said: “We reject an individual tax-raising competence for the EU.”

German news website Spiegelonline said there was rare unity among the main German parties in rejecting Mr Lewandowski’s idea – except for the Greens.

According to Mr Lellouche, “The idea of a European tax raises fundamental political issues and would constitute a very big transfer of sovereignty.”

But in Austria a spokesman for Finance Minister Josef Proell said: “We take a positive view of the Lewandowski announcement.”

Hard bargaining

Historically, national governments levy taxes in the EU.

The 27 EU member states pay a fixed contribution to the EU budget, based on their gross domestic product and a percentage of their sales tax (VAT).

This year Germany’s transfer to the EU budget – the largest contribution – is about 21bn euros (£17.5bn).

Some countries, including the UK, get rebates – and there is expected to be hard bargaining over those sums later this year.

The European Commission has run into opposition from member states over its plea for an increase of nearly 6% in the EU budget for 2011 compared with this year.

Traditionally taxes are seen as a prerogative of nation states and any move by the commission to levy taxes directly is likely to be opposed by eurosceptics wary of Brussels’s powers.

The EU’s budget for this year is 122.9bn euros (£110bn) – nearly half of which is allocated to agriculture and natural resources. It is 6% bigger than the 2009 budget.