The practice of taking out a single loan in order to pay off all previously existing loans is referred to as consumer credit debt consolidation. The reasons that people choose this debt elimination option are to secure a lower interest rate, and also for the simple convenience of having to pay only one loan at the end of each payment period.

Collateral is traditionally required in these types of loans due to the borrowers tarnished credit history. Depending on the total amount of the consolidated loan, the collateral may be the owners home, automobile, or any other piece of property of considerable monetary value.

If you are a home owner with a sum equity invested in your home, then you have the opportunity to apply for a home equity loan. This type of loan is reserved for people who own a home and are struggling with other debts. In this case, your home is counted as the collateral. This may seem like somewhat of an intimidating option, but there is one significant advantage that attracts many people. Since the collateral is of such high personal and monetary worth to the borrower, the interest rate on the loan would be significantly lower than any other loan.

Even if your debts are not causing a tremendous burden on your bank account, reorganizing your debts may still make good business sense. These are just a few of the ways you can go about it:

Home equity loan

These loans have an attractive advantage in that they carry a low interest rate, and whatever interest you do pay is tax deductable. Any time taxes are taken out of the equation is a great time. It goes without saying that that would be one less expense you would have to deal with each month.

Refinance for extra cash

Another great advantage of taking out a home equity loan, or a consumer credit debt consolidation loan, is that you can refinance your property for a greater amount than what you actually owe. When you do this, you can use the extra money from your new loan to pay off your other debts. Yet again, the interest rate you would get on this sort of a loan would be relatively low.

Refinance your vehicle

Your personal vehicle is considered as an eligible asset and can be used as collateral in your refinancing. One issue you may have to face, however, is that due to the nature of an automobile, your car may break down before you even have the chance to fully repay your debts.

Obtain a personal loan

If you have untarnished credit then you are qualified for an unsecured loan, otherwise known as a personal loan. Word of advice: credit unions will typically offer lower interest rates than banks, so you may consider getting in touch with them instead.

Self negotiating

Direct dealing is more effective in some cases than dealing through others. This way you can communicate directly with your creditors, or whatever other parties are involved, and you wont have to worry about paying for the services of a middle man. As an added bonus, sometimes customer service representatives are capable of reducing interest rates for clients with a simple phone call. Maybe you ought to try putting in a call to your creditors, today?

Another alternative

You may also want to consider the options you can find on the Internet for consumer credit debt consolidation. There are a lot of scams circulating around the web, but if you do your research, you are sure to come across a legitimate company that you can work with. There are many truthful success stories around the Internet that can attest to the power of some online debt consolidation companies.