Question:

How to decide - secured debt consolidation versus unsecured debt consolidation loan?

Answer:

It will depend on circumstances whether to use secured debt consolidation or unsecured debt consolidation loan.

If you own a real estate property and your credit is good, you may get very good low rates for a secured debt consolidation loan. However, in that case you are using your house as the collateral, the lender feels safe, and you may be repossessed of your home if you default on payments.

At the same time, unsecured debt consolidation loans carry a lot higher risk, hence rates are so much higher. Even though you could be using another asset as collateral, your car may not be a sufficient warranty for regular payments. That is, taking an unsecured debt consolidation loan will take place upon your word for repaying the loan and you should be prepared to expect substantially higher rates - 10 percent or even more than a secured loan to consolidate debt.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: