Secured loans are backed by an asset of the borrower’s, such as a house or a car, that works as collateral for the loan.
There are several ways consumers can lump debts into a single payment.
Individuals usually work with a debt-relief organization or credit-counseling service.
These organizations do not make actual loans; instead, they try to renegotiate the borrower’s current debts with creditors.) Freeman says that debt consolidation loans are most helpful for those who have multiple debts, owe ,000 or more, are receiving frequent calls or letters from collection agencies, have accounts with high interest rates or monthly payments, are having difficulty making payments or are unable to negotiate lower interest rates on loans.
“If you can get your bank to approve a loan, that’s great," says Tim Gagnon, assistant academic specialist of accounting at the D'Amore Mc Kim School of Business at Northeastern University.
"But your bank may not be looking to keep you as a client and your credit scores may not be high enough to meet their lending requirements.” If you’re turned down by your bank or credit union, Gagnon suggests exploring private mortgage companies or lenders.