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Also, secured loans are generally easier to obtain because they carry less risk for the lender.

there is a huge downside to consolidating unsecured loans into one secured loan: When you pledge assets as collateral, you are putting the pledged property at risk.

When you take out a secured loan, such as a mortgage or a car loan, you pledge certain property, such as your home or your car, to secure the repayment of the loan.

Often, there is a transfer fee in the fine print which negates some of the savings.

There are also rules which may diminish the benefits.

A 401K loan uses your retirement fund as collateral.

If you have a life insurance policy with cash value, you may be able to obtain a loan against the policy. Often, secured loans carry lower interest rates than unsecured loans so they may save your money on interest payments.

Whether you are teetering on the edge of bankruptcy or just trying to better manage your finances, you can’t help but notice all the advertisements touting debt consolidation. Read on to learn about the different debt consolidation options and the pros and cons of each.

(To learn about other ways to handle debt, see our Debt Management topic area.) With debt consolidation, you get a single loan to pay off all of your smaller loans, thereby leaving you with just one monthly payment rather than several.A variety of financing firms will also loan you money against lawsuit claims, lottery winnings, and annuities. Lower interest rates will likely make the monthly payment lower and more affordable.Sometimes, the interest payments are even tax deductible.This may result in a payment that is not low enough to make a difference in your financial situation.Using balance transfer options on no-interest or low-interest credit card offers are tricky.For example, in many instances interest paid on loans secured by real estate is allowed as a tax deduction.