The easiest type of debt consolidation loan to qualify for is a Secured Debt Consolidation Loan.
As the name implies, a secured loan is a loan secured by an asset. For example, a car loan is a loan secured by a car. If you don’t make your loan payments, the lender can repossess your car.
Another common type of secured loan is a mortgage, which of course is a loan secured by the value of your house or other property. Why do lenders like making secured loans? Simple. They know they can recover some or all of their money if you don’t pay.
In contrast, an unsecured loan has no security, so if you don’t pay there is no asset, like a car or a house, for the lender to seize. It is the value of this security that makes it easier for the lender to lend to you, and to offer you a lower interest rate on your loan.
That’s why the interest rate on a house mortgage is lower than the interest rate on a credit card. Here are some sample interest rates (which are presented for illustrative purposes only, since interest rates can change on a daily basis):
- House mortgage 6%
- Car loan 8%
- Bad credit car loan 15%
- Bank credit card 18%
- Store credit card 25%
- Finance company loan 33%
What does this list illustrate? Simply put, the best interest rate on a debt consolidation loan will be on a secured debt consolidation loan, such as a mortgage.
If you have equity in your house, you can borrow against that equity to consolidate your higher interest debts.
Information about Mortgages and Home Equity Loans
Mortgage Debt Consolidation
Home Equity Debt Consolidation
Refinance Debt Consolidation
Reverse Mortgage
Debt Consolidation Home Loan
Debt Consolidation Mortgage Refinance
Mortgage Loan Debt Consolidation
Debt Consolidation Mortgage
If you own a car with no loans against it, you may be able to pledge that car as security for a loan or line of credit with your bank.
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