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Debt Relief Loan Options

Debt Relief Loan Options

Get rid of your debt faster with debt relief

Choose your debt amount

See if you qualify

Or speak to a debt consultant  844-731-0836

Mark Cappel
UpdatedJul 17, 2024
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    3 min read
Key Takeaways:
  • Consider a consolidation loan to pay-off your debt sooner or to make your monthly payment smaller.
  • Review the differences between secured and unsecured loans.
  • Avoid running up new debt, after you consolidate your old debt.

Learn your debt relief loan options.

You might be interested in a debt relief loan if payments to many different lenders and high interest rates are straining your finances. Consolidating your debt can reduce your monthly payments by lowering your interest rates and/or extending your term. Usually, in order to do so you must take out a loan. By allowing you to pay off your original debt, this loan will consolidate all your separate payments into one monthly payment. Note that you are not actually eliminating your debt, but instead giving yourself relief from the pressure associated with the debt you have.

You have a few different debt relief loans to choose from when you consolidate your debt. All loans break down into two types: secured and unsecured.

Secured Debt Relief Loans

An asset or collateral of some sort protects the lender when you obtain a "secured loan." You must own items, such as property or a car, which the loan can be secured against, even if they are not fully paid off, to obtain a secured loan. The lender can place a lien against these items. A lien will keep you from selling the property or will allow the lender to force your property into sale in order to collect on the loan if you fail to make payments according to the agreed upon terms. When you take out a secured loan, the lending company holds your title to your property until you settle your debt in full, including all interest and applicable fees. Because your debt is secured against actual assets, lenders are more likely to grant you larger amounts of money than an unsecured loan.

Types of secured loans include home equity loans, home equity lines of credit, mortgage refinance loans and second mortgages. These loans are based on the total value of your home minus the amount you still owe. You can use these loans to consolidate your debt and pay your original debt off. Once you pay the original debt off, you will have a more convenient single monthly payment and hopefully a lower interest rate, as secured loans typically have lower interest rates than unsecured loans. The downside to this sort of loan is that if you have budgeted incorrectly and are unable to make payments for your consolidated loan, you may lose the property against which the loan is secured.

Unsecured Debt Relief Loan

An unsecured debt relief loan is harder to obtain because the lender has nothing to collect if you are unable to pay them back. Lenders will look at your credit and employment history in order to determine your risk level: or what is the statistical likelihood that you will repay the loan. Regular payments on your current debt and a stable employment history show that you are not a high risk. There are lenders who will give unsecured loans to you if you have bad credit or unstable employment history, but their interest rates are usually very high. Any unsecured loan will have a higher interest rate than a secured loan and usually will be for a limited amount.

It is easier to obtain unsecured personal loans through consolidation companies if your debt is good debt as opposed to bad debt. Good debt is incurred from an investment (mortgage) or improving yourself (student loan). Bad debt is incurred from credit cards, retail charge cards, and financing luxury items like electronics or boats.

If you believe you will be able to make one larger payment on time and in full, then consolidation may be an easier option for you. However, remember that even at a lower interest rate, which may be difficult to get if your loan is unsecured, paying your debt off over a longer term will result in a higher grand total on your loan just by virtue of the increased amount of time over which your loan will have interest applied to it.

Get rid of your debt faster with debt relief

Get rid of your debt faster with debt relief

Take the first step towards a debt-free life with personalized debt reduction strategies.

Choose your debt amount

Get started now

Or speak to a debt consultant  844-731-0836

Did you know?

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Housing debt totaled $12.82 trillion and non-housing debt was $4.88 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

The amount of debt and debt in collections vary by state. For example, in Georgia, 34% have any kind of debt in collections and the median debt in collections is $1854. Medical debt is common and 17% have that in collections. The median medical debt in collections is $855.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.



AAnonymous, Mar, 2019

Don't get scammed like I was by Larry Ellison Finance and their bs offer of 2% loan.

KKalifa, Nov, 2012
I am so happy I came across this site, and have so many questions I am overwhelmed. I noticed a medical bill on my credit report that I didn't know existed. At the time I had full coverage in medical insurance but somehow the medical center neglected to send the proper information of my medical surgery to my health insurance at the time. This was 3 years ago while I was living in another state. Where do I begin to get it off my credit report. I do not owe this bill. My insurance should have fully covered it but someone in the doctors office neglected to do their work now it's on my credit report. HELP PLEASE!
BBill, Nov, 2012
Please see the article How to Negotiate Your Medical Bills for a discussion of the issues you raise in your comment. I encourage you to ask any follow-up questions you may have on that page.
BBrandi, Jul, 2012
I have a loan on my car and also some other unsecured debt. Is there any company that will let you consolidate a secured loan with unsecured debt?
BBill, Jul, 2012
A bank or credit union could, in theory, offer you a loan large enough to consolidate your auto loan and your other debts. However, it is hard to find this kind of loan at a reasonable interest rate.

Is your goal to simply have one payment? Are you struggling with high interest rates on your debts? Are you having trouble making your payments? Your answers to these questions will dictate what your best solution will be.

I suggest that you use the Debt Coach, to find the best debt solution for your individual situation.
EElizabeth, Jun, 2012
Most people on this web-site are people with credit problems. How are we to get a consolidation loan with credit in the low 500s. A year ago my credit was in the 750 range, but due to circumstances beyond my immediate control I got behind on my credit cards. To make it short. I lost my business, my husband lost his job, my tenants in our commercial building stop paying rent. We ended up giving it up. Deed in lieu of foreclosure. Have gone through all most our savings trying to maintain. Husband finally found a job after looking for two years. Had to relocate, spent the rest of our savings moving. Owe 65k on our mortgage, which our son makes. Zillow values it at about 159k. Been on the job 4 months now. Bringing home $3500./mo. Our bills consist of 800mo/rent and utilities. Would like to pay off credit cards, actually we just settled one of them, with what we were able to save since starting work. Now were broke again. With the high interest and the fees they added to our cards for not paying we can't afford to pay them monthly, and still be able to put money away for a rainy day. (medical expenses, car expenses, etc). My question, is it possible to get a loan? I've been told no about six times now from various lenders. I thank you for your time and all the valuable information on your web-site. Your doing a great job.
BBill, Jun, 2012
Elizabeth, given the harm to your credit from the late credit card payments, it is unlikely that you will find a loan that will improve your position. Your positive cash flow (based on the $3,500 take-home vs. your $800 for rent and utilities) leaves you with a couple of options. 1. A credit counseling program could help you lower your interest rates from the penalty rates you've been saddled with. It is possible that some of your late fees could be reduced, too. 2. Continue negotiating settlements on your accounts. You could speak with a professional debt settlement firm, too.

It is smart to work to build up a rainy-day fund, but doing so may be less of a priority than paying off high-interest debt.

AAllan, Apr, 2012
My wife lost her Job. I'm holding it down but am sinking fast. Just found out we are expecting another child and seriously need financial assistance like "NOW" $15,000 would consolidate my current debt and get me on track to managing and maintaining my finances until my wife finds another job. Can Somebody help us please??? (Been on my Job 6 years. I make $19hr. Making payments would Not be a problem.)No games, scams or illegal activity please. I need help from someone willing to do ligit business
BBill, Apr, 2012
To qualify for an unsecured loan, your credit score and debt-to-income ratio will be examined. Most unsecured loans from banks or credit unions have moderate to high-interest rates, so, even if you qualify, it won't help unless your other debts are at higher rates.

If you can't get a loan that helps you, look into a credit counseling program, if your interest rates are a main problem.