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Debt Consolidation Loans
A debt consolidation loan is a loan that you can borrow to help repay your other loans. Debt consolidation loans help you organize your debts by consolidating them into one monthly payment, oftentimes at a lower interest rate.

To get a debt consolidation loan, you must typically have a good credit score, the ability to repay the loan and you usually need to have equity in your home. You want to think about pursuing this debt relief option only when you can afford to repay the loan and understand the consequences of converting unsecured debt to secured debt.

People often choose debt consolidation loans to secure a lower or fixed interest rate and because they want help organizing their debts. Remember that a debt consolidation loan helps you to reorganize your debts to make it easier to pay them off. It does not relieve you of your debt burdens. This option is a viable debt relief option only when you can afford to repay your debts in a consolidated monthly payment.

Other debt relief options may include some form of debt consolidation, (e.g., debt settlement, debt management plans, consumer credit counseling services) but these options do not typically involve taking out a loan to consolidate your debts.

Here are some more facts about debt consolidation:

Payback can take as long as 10 to 20 years depending on debt balance and your ability to pay.

You pay back the full amount of credit card balances, plus interest and any fees.

These loans require ownership of a home or a pledge of collateral.

Defaulting on a Home Equity Loan could cause you to lose your home or the collateral you pledged.

A transaction fee is usually required upon closing or it is built into the interest rates.

You must qualify for debt consolidation loans, and those who qualify are usually not debt settlement candidates.