Can I use a personal loan to consolidate debt? |
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Answer:
Many consumers use personal loans to consolidate their credit card balances Secured loans use something you own as collateral such as stocks, bonds, cash, and personal property. The rates on secured loans are lower because the lender can take possession of the collateral if you default. With unsecured loans, there is no collateral, so you may not be able to borrow as much and will likely pay a higher interest rate. Debt consolidation allows you to merge your existing debt into a single loan with a manageable monthly payment. Getting a manageable monthly payment or a lower monthly payment is the goal with debt consolidation. Debt consolidation with a Secured Personal Loan would be a good idea if the interest rates are lower than your exisiting debts however I doubt an Unsecured Personal Loan will provide low enough interest rates to make it an attractive option. Trackback(0)
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