Finding the Consolidation Loans that You Need

Consolidation loans can be very useful in a number of circumstances? they can be used to consolidate multiple loans at a single institution, to eliminate debts and combine them into a single monthly payment, and even refinance old loans into a single loan with a lower interest rate.

Different types of consolidation loans exist for people with a variety of different credit ratings, and are exceedingly useful in credit repair and avoiding bankruptcy. If you're shopping for consolidation loans then the process can seem confusing at times? there are several terms associated with these loans that can leave you scratching your head if you're not familiar with them.

Secured, or unsecured?

In the world of consolidation loans, security has nothing to do with making sure that the money isn't stolen. In this instance, "security" refers to whether or not some property of value (known as "collateral") has been used to guarantee repayment of the loan.

If the loan is secured, then the value of the collateral (which is most often a vehicle such as an automobile or truck, or a piece of real estate such as a house) is used as a basis for the loan.

Consolidation loans that are secured enable the lender to legally take possession of the collateral and sell it off to get their money back if the borrower doesn't repay the loan.

Lenders don't like to possess property in this manner, as it costs them both time and money, but they'll do it if all other attempts to collect on the loan fail.

Unsecured loans, on the other hand, don't require any sort of collateral as a guarantee. There aren't many consolidation loans that are unsecured, and the ones that are usually either combine loans held at a single bank or are for relatively small amounts.

These loans have higher interest rates than their secured counterparts, but don't carry the possibility of having the collateral repossessed and sold (since there isn't any collateral to repossess or sell.)

So what are interest rates, anyway?

The way that banks and other lenders make money off of consolidation loans is by charging interest, or an additional amount that's added onto the borrowed amount at regular intervals.

Interest rates are expressed as a percentage, and that percentage of the remaining amount of the loan is added to the loan every month (or however often the interest is compounded, or calculated.)

The interest rates of consolidation loans can vary depending upon rates set by the government, bank or finance company promotions, the value of the collateral offered (for secured loans), and the credit history of the borrower. Ideally, you want the interest rate to be as low as possible? this means that you'll have less to pay back than you would with a higher interest rate.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

---

Debt Consolidation Service In Birmingham

Jane was a fun loving girl from Birmingham, you could... Read More

Debt Consolidation Loan and Consolidation Loans

Debt consolidation loan services act as a third party intermediary... Read More

Reducing Debt Through Lower Interest Loans

It happens to the majority of us, credit card debt... Read More

Debt Elimination: Legal! Lawful! Ethical! Debt Elimination Really Works

You are trying hard to eliminate your loans but keep... Read More

Individual Voluntary Arrangement IVA, an alternative to bankruptcy

Individual Voluntary Arrangement, IVA is an alternative to bankruptcy -... Read More

Online Debt Consolidation ? Devising Newer Ways for Changing Consumer Trends

Consumers today are getting wiser by the day. They are... Read More

How to Choose a Debt Consolidation Loan?

If you have decided that a debt consolidation loan is... Read More

Shocking Facts - What Debt Settlement Companies Dont Tell You

If you're thinking about using a debt consolidation or debt... Read More

What is the Difference Between Unsecured and Secured Debt?

A secured debt is a debt in which the creditor... Read More

Debt Consolidation Confusion

Learning about debt consolidation can be quite a confusing venture... Read More

Debt and Bill Consolidation - Signs You Need To Consolidate Your Debt

If your debt is becoming difficult to get on top... Read More

Does Working With a Credit Counseling Organization Hurt Your Credit Score?

Credit counseling organizations do not lower your credit score when... Read More

Vultures and Victims

Has anyone noticed how many loan companies now fill up... Read More

16.4% APR $5,000 Auto Loan...HELP!

Are you the victim of a high interest rate auto... Read More

Debt Consolidation: Its all in the Planning

If you're like thousands of other people who find themselves... Read More

What is Debt Consolidation?

Debt consolidation may be the answer for anyone drowning in... Read More

Debt Consolidation Makes Sense Only with Low Interest Rates

Credit that cannot be managed or is not being repaid... Read More

Debt Consolidation Solution

Debt Consolidation is a solution that solves your debts. Debt... Read More

Debt Consolidation: Reduce Your Monthly Debt Payments Now

Debt consolidation is frequently becoming a very familiar term used... Read More

When Your Bills Are Piling Up Here Are 6 Different Ways to Consolidate

When it comes to debt consolidation some people dream of... Read More

Online Debt Consolidation Services - Lower Your Monthly Payments Now

Consumers looking for a way out of debt may want... Read More

Debt Consolidation -- Choose Your Credit Counselor Carefully

Recently passed by Congress, the Bankruptcy Abuse Prevention and Consumer... Read More

Avoid Bankruptcy

The first but definitely not the easiest thought that comes... Read More

Stafford Loan Consolidation

Stafford Loan ConsolidationA Stafford Loan, which can help to finance... Read More

Credit Counseling ? Get in Line Now to Avoid the Upcoming Rush

Credit counseling is a valuable service for consumers who have... Read More

Bad Credit Debt Consolidation Loans

Are you looking to consolidate credit card or other debt?... Read More

10 Pointers on College Loan Consolidation

Should I consolidate my college loans or not?1. Still in... Read More

How To Get Rid Of Debt Problems Step 1 -- How To Deal With Your Creditors

However far you are along the road of financial/debt problems,... Read More

Considering Debt Settlement? What You Should Know

Your credit card bills are stacking up and for whatever... Read More

What is Debt Consolidation?

Here is a useful guide to what is Debt consolidation.... Read More

What is a Debt Consolidation Loan?

If your objective is to reduce interest rates and lower... Read More

How To Get Rid Of Debt Problems Step 2 -- How To Prepare A Financial Statement

Here is how to prepare a financial statement, for the... Read More

Bad Credit Debt Consolidation Loans - Getting a Debt Consolidation Loan, Even With Poor Credit

An online debt consolidation loan allows even people with a... Read More