A debt consolidation loan is a loan taken to consolidate a number of loans into one manageable loan. A debt consolidation loan can also help you in reducing the cost of your total debt as it usually carries a lower rate of interest than other loans, such as personal loans, credit cards, car loans, etc. A debt consolidation loan with an extended loan period can reduce the amount of your monthly loan repayments.

Thus, there are three main objectives of debt consolidation:

· To consolidate a number of loans into one manageable loan.
· To reduce the cost of debt.
· To reduce the amount of monthly loan repayments.

You may avail different types of loans to consolidate your debt:

Secured Loans Debt consolidation through secured loans is a logical thing to do since secured loans carry low rates of interest and one of the objectives of debt consolidation is to reduce the cost of debt. However, you must be very careful while consolidating your debt through secured loans since it puts your property at the risk of repossession in case of repeated defaults in repayment on your part.

The San Diego Condo Market: Number Two and Rising?

Student Loan Consolidation Program - Are The Benefits Worth Your Effort?

Understanding Free Debt Consolidation Services

Online Debt Consolidation For Convenient Debt Recovery

You Need A Wealth Creation Strategy

Nonprofit Credit Counseling Agencies - Think Twice Before You Leap

Secrets That Credit Companies Don't Want You To Know About Debt

Tips for Credit Card Consolidation

What is Your Creative Retirement Plan?

There Are Real, Live People Behind Currency Trading

You may also consolidate your debt through unsecured loans. However, before availing an unsecured loan to consolidate your debt, make sure that it does not carry a very high rate of interest otherwise the very objective of reducing the cost of debt will be defeated.

Home Equity Loan

Home equity loan is a type of secured loan. Home equity is the value left in a house after subtracting the unpaid mortgage balance from the current value of the house. A home equity loan is a second mortgage, which is taken against a house that is already mortgaged.

Low Interest Credit Cards

You can also reduce your debt burden by availing a new credit card that charges a lower rate of interest than your existing credit cards. If you use a low interest credit card to repay your earlier credit card dues, it will greatly reduce your debt burden. This can be even more beneficial when the new credit card offers 0% interest credit if it is repaid within a stipulated time.

The author is a business writer specialising in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Shakespeare Finance as a finance specialist.