Debt Consolidation Loan

A debt consolidation loan is a loan you acquire from your bank to pay all your individual unsecured creditors in full. This loan allows you to make one single monthly payment to your bank rather than several separate monthly payments to your individual unsecured creditors. The interest rate offered on a consolidation loan is usually less than the interest rate offered by your individual unsecured creditors.

A debt consolidation loan is a good option if you are able to qualify for the loan, have the monthly income to afford the monthly loan payments and have the discipline not to incur any further debt until the consolidation loan is repaid in full.