Debt Consolidation Loans

Debt Consolidation Loans

Is your debt giving you nightmares? Turn those nightmares into dreams--dreams of debt consolidation loans.

What's Your Dream?

To be debt free? That's exactly what debt consolidation loans can do for you. In your dreams, you probably got a check in the mail that was exactly the amount you needed to pay off all your unsecured debts. You promptly deposited that check and paid everything off. What an amazing feeling! But that's no dream--debt consolidation loans are actually real. And if you have collateral, you can make that dream come true.

There's no magic involved in debt consolidation loans. They're simple and straightforward. And the interest rate is so low that you will be out of debt in five years! Just like in your dream, you get a check to pay off all your unsecured debts. Then instead of all those bills each month, you have just one--your debt consolidation loan payment.

Of course, if you don't have any collateral, debt consolidation loans won't work for you. The loan company will want something in the amount of the loan that they can sell to get their money back in case you default. Some people use their car if it's paid for, but you can also use a boat or anything similar you have that's paid for. Some even use their house, but that's not smart for a number of reasons. Let's say you use your house as your collateral and default on your loan. If your loan is only around $9,000, but your house is worth $200,000, and you default on your debt consolidation loan, the bank has the right to sell your house to get their $9,000. What about the remaining $191,000? Does the bank get it? Who knows? But you'll still have to pay the mortgage off because it's a separate thing. Besides, if you're a homeowner and you're trying to pay off debt, the smarter tool is a debt consolidation mortgage. This adds the amount you borrow to pay off your debts on to your mortgage and you pay it off at that same interest rate over the life of the mortgage.

Of course, if you don't have a house or collateral, there's always a basic debt consolidation plan that can get you out of debt in five years. Read all about that on the "debt consolidation" page on this site.

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