Because of the collateral, companies are willing to offer lower interest rates with a secured loan.
You'll have to decide whether lower interest rates are worth the risk of losing your home or car.
Many credit card companies advertise 0 percent balance transfer fees -- you can bring over the old credit card debt with no charge.
Some people pay off debts by jumping from one low-rate introductory offer to another.
It also assumes that the monthly flat rate for a Citibank Card Debt Consolidation Loan is 0.28% and the APR is 6.48%, based on a 60 month repayment term.
They often are willing to take more risks and lend money to people with lower credit scores.
Going through a bank is often the best way to get a consolidation loan [source: Wilmington Trust].
You usually can qualify for a lower interest rate from many banks if you can deduct payments from an account you have with them.
If default occurs, then the company that loaned the money can legally repossess your house or car.
In contrast, an unsecured loan merely uses the debtor's credit to back the loan.