At one point in time, many individuals will find themselves with an excess of debt and unsure of how to get everything paid. Unfortunately, many often find themselves going through foreclosure of bankruptcy as they are not aware of what all their options are. One option to those that have accumulated a lot of debt is a debt consolidation loan. This type of loan is one that will combine the existing debt that you have into a single debt. This will allow you to have one payment each month, instead of several. The following is some information to help you decide if a debt consolidation loan is right for you.

Secured or Unsecured

There are two types of debt consolidation loans: secured and unsecured. The secured requires you to have collateral against the loan, while there are no collateral requirements with the unsecured. If you have a healthy credit score, you may be able to qualify for the unsecured; however, if you have any blemishes on your credit record, you may be required to put down collateral against the amount you borrow.

Amount Borrowed

Many lenders have set a requirement on the minimum amount that must be borrowed and most of them have a maximum amount that you may borrow, as well. Many of the lenders will also work with individuals who have less than perfect credit and they will offer you flexible terms. However, they will often charge a much higher interest rate to those who have imperfect credit.

Advantages of Debt Consolidation Loan

The benefits to this loan are many and include allowing you to get their finances under control with just one single payment, saving money as you