Quick note: Consolidation loans and balance transfers can be really helpful when trying to get out of debt.  Just be sure to do your homework and make sure you’re saving money.  If the interest rate isn’t low enough to create a large saving, you may want to look at another offer.  Also, the writer has directed this article towards UK readers to provide balance, but the principles apply to everyone.

The mirth and merriment of Christmas are very much upon us, with the big day now getting very close. It’s a time of laughter, fun and special times with friends and family – just as it should be. Yet with the unrelenting social activities that come with it, costs of buying presents and other wallet drainers, there is no doubt that the holidays can put a strain on anyone’s budget, and maxed-out credit cards are hardly unusual by the time January dawns.

But instead of using the festive season as an excuse to exacerbate your existing high-interest debt, why not see it as the time to take action, and eliminate it instead? The path to becoming debt-free isn’t as arduous as it may seem, and with a combination of self-discipline and some clever strategic thinking, you can start getting yourself very much on track.

The Ease of Consolidating Debt

Perhaps the simplest and most underrated means of getting one’s finances in order are debt consolidation loans. Despite having been around for a long time, these types of personal loan are relatively unknown to many. The logic behind them is simple: Acquire a single, low-cost loan to cover the outstanding capital balances on your high-interest debt like credit cards or overdrafts, leaving you with just a solitary obligation to pay off each month, at an affordable rate of interest.

Aside from the reduced stress of no longer having to juggle different lines of credit, with different repayment amounts and repayment dates, there are significant savings to be had. The key though, of course, is to find that loan with an APR which undercuts the collective average on your previously existing debts.

Yet negotiating the world of unsecured loans isn’t actually the minefield some may perceive it to be, and as a quick look at any price comparison site will quickly evidence, there are some great deals to be had for borrowers. This owes in part to record-low Bank of England rates, but perhaps more so to increased competition in the market for consumer finance. Alternative online providers have shaken up the previously bank-dominated landscape, and are offering good-value, efficient solutions.

The Popularity of P2P Lenders

In particular, peer-to-peer (P2P) lenders tend to crop up on or near the top of comparison sites, and it shouldn’t come as any surprise. These platforms go about their business by matching money from normal people who opt to lend their savings directly with those who are seeking a loan. This results in an intermediary-free transaction, where pounds are matched on a one-to-one basis in order to deliver excellent value to both the lender (who gets a good return via repayments) and the borrower (who gets a low interest loan).

Best of all, it’s all done completely online. The platform takes a small fee for facilitating the process and for conducting credit checks, but for a borrower, the effort required is minimal other than completing a brief online application form. After selecting the amount (£1,000 to £25,000) and the term (1 to 5 years) of the loan, an applicant can expect confirmation within a working day, and, if approved, the funds to arrive overnight.

But it is the saving that stands out most. Consider a loan of £5,000 over 3 years, with an APR of 6.4% (which seems to be about the average Representative APR among P2P lenders) compared with the same principal amount on a credit card at an APR of 17.8% (rate as per the UK Cards Association Q4 2014 Report). Over the course of 36 months, you’d make a saving in excess of £1,200 in interest if you were paying off the former as opposed to the latter, which, suffice to say, is no small amount.

So, if high-cost loans are a heavy anchor on your monthly budget, don’t make things worse by going on a credit card-fueled spending spree this Christmas. Instead, prioritize tackling them, so that you can start the New Year feeling optimistic – not broke. Debt consolidation loans represent a quick and easy means of getting the wheels in motion, and can really set you on your way. Thereafter, it’s up to you to keep chipping away to reach that wonderful plateau of financial freedom.