| Unsecured debt consolidation loans are loans that | | | | Usually, the amounts disbursed as unsecured debt |
| individuals take out from a bank without placing any | | | | consolidation loans are lower than what would have |
| collateral for the loan. Such loans are availed to pay | | | | been if the debt consolidation loan was secured. Wells |
| off credit card debt or medical bills. Normally, debt | | | | Fargo Financial, for example, offers its customers |
| consolidation is undertaken to reduce and eliminate | | | | home equity lines of credit for debt consolidation |
| debt by paying off a high-interest unsecured loan, like | | | | starting at $10,000, whereas unsecured personal loans |
| credit card debt, with a low-interest secured loan like a | | | | for debt consolidation at capped at $10,000. So |
| home equity line of credit. Debt consolidation thus helps | | | | unsecured debt consolidation loans are essentially for |
| in lowering interest rates, which works in the long run to | | | | those individuals who carry lower credit card debt, but |
| eliminate debt faster. | | | | still want to consolidate it and eliminate it completely. |
| Unsecured debt consolidation loans are not secured by | | | | While an unsecured debt consolidation loan is a good |
| any collateral like a home or a car. These are mostly in | | | | way to pay off high-interest credit card debt, very |
| the form of personal loans. Personal loans are one | | | | often individuals end up a few years later with a similar |
| way of paying off credit card debt if one does not | | | | credit card debt and the added burden of paying off |
| own a home or a car. Many banks offer such plans | | | | the personal loan. The critical element to debt reduction |
| for their customers who have a satisfactory banking | | | | and elimination is to keep a check on one's spending. |
| history with them. However, interest rates on | | | | There are secured and unsecured debt consolidation |
| unsecured personal loans would be higher than a | | | | loans available to help one out of debt, but the process |
| secured home-equity line of credit. | | | | must start at the individual's level. |