Many Americans have become overwhelmed with debt. Monthly statements from student loans, mortgages, car payments, and credit cards fill the mailboxes of millions of consumers everyday. A Debt Consolidation loan can be an effective way to pay off high interest credit card debt and provide debt relief through lower interest rates.
The most common type of debt consolidation loan is a personal loan, either secured or unsecured.
Secured Personal Loan: This type of debt consolidation loan is protected (secured) by an asset. Common assets used to secure a loan are vehicles, stocks, bonds, or personal property. A secured loan generally has a lower interest rate than an unsecured loan.
Secured LoanSecured loans are a common way to get large amounts of money because you are providing security that you will repay your loan. The risk associated with a secured loan is if you do not repay the loan your assets will be sold to pay off the loan.
Unsecured Personal LoanAn unsecured personal loan is riskier for lenders, therefore the interest rate is higher. Unsecured loans are more difficult to get if you are experiencing credit issues.
A debt consolidation loan, whether secured or unsecured, is a way to consolidate all your debt into one loan with one payment and a fixed interest rate. You will know exactly what you are paying each month and when the loan will be paid in full.
For more information, contact one of our specialists to help you assess if a Debt Consolidation Loan is a good option for you.