Unsecured Debt Consolidation Loans – Do they still Exist?


Debt Consolidation is a popular term thrown around quite a bit in the context of getting out of debt. According to google the term debt consolidation loan or some variation of the phrase is searched for over 10 million times a month.  The ironic thing is that in this current economic climate, a secured debt consolidation loan is very difficult to get and an unsecured debt consolidation loan is all but impossible to obtain.

I have heard people use the term debt consolidation to talk about home equity loans, signature loans, balance transfers, consumer credit counseling, even debt settlement.  For the purposes of this article, when I refer to debt consolidation or a debt consolidation loan, I am speaking specifically about borrowing money to pay off other debts and consolidate them into one new payment.  Consumer credit counseling and debt settlement are not debt consolidation loans, even though people sometimes mistakenly use that term to describe them.

Unsecured Debt Consolidation LoanDuring the housing boom we couldn’t turn on the radio or the television without hearing or seeing an ad about the wonders of refinancing our houses to pay off credit cards.  Everyone, including many mainstream financial planners were saying that it was “a smart thing to do.”  Hurry, rates are at an all time low, consolidate your debt, pay off your high interest credit cards, become DEBT FREE. Smart, Smart, Smart, or so we were all told.

What most consumers where not told was about the huge potential drawbacks that have now become all too real for consumers across the country.  Trading unsecured debt for secured debt is not always the most advisable move.  Sure it can make a lot of sense on paper by lowering your overall interest rate and rolling 5 or 10 credit card payments into one more manageable monthly payment.  However, the reality for many consumers was after the debt was rolled into the new mortgage or loan, either out of a lack of discipline or necessity, many consumers found themselves back in as much if not more credit card debt within a few years.

Housing MarketNow that the housing market has taken a dive and the atm machine in the kitchen is broken, consumers are scrambling for a solution to deal with mounting debts. Getting a debt consolidation loan in order to pay off high interest credit card debt  is flat out impossible for most consumers in this current economic climate.  If you have good credit, and a ton of equity in a piece of property, then a secured debt consolidation loan may be possible, however most people that are in need of some type of low interest loan are not in a position to qualify for one.

There is a lot of deceptive advertising out there promising debt consolidation loans to consumers.  The reality is that many of these ads are for credit counseling companies, or what I would consider Loan Shark interest rate loans.  Many consumers upside down in their houses, with no assets are searching in vain for unsecured debt consolidation loans.

For the most part these loans either don’t exist or are unobtainable to someone that would be in desperate need of one.  In this current economy, lenders are not keen on taking unnecessary risks.  If you are a consumer that is up to your eyeballs in debt, and struggling to keep up, it is a pretty tall order to ask someone to step in and pay off all of your debt and then allow you to pay them back at a lower interest rate than you were paying before.

The bottom line is that if you do not have perfect credit and at least 30% equity in a home or some other asset, you should not waste your time looking for a lender to provide you with an unsecured debt consolidation loan at a nice low interest rate because it is not available.  However, if you happen to have a 401K with your current employer and it has a provision that allows you to borrow a certain percentage, then you can actually provide yourself with a consolidation loan to get your creditors paid off.

A word of caution though, it is often times ill advised to drain your 401K to pay off high interest debts.  If you are considering borrowing or withdrawing from your 401k or IRA accounts you should consult with a financial professional before doing so.  There could also be potential tax ramifications depending on your age and whether or not you are going to borrow or withdraw the money.

If you are in debt and it is clear that an unsecured debt consolidation loan is not an option, then you will need to research other strategies such as Consumer Credit Counseling, Debt Settlement or possibly even Bankruptcy.  Again, be sure to first consult with a knowledgeable financial professional before making a final decision on any strategy.

UPDATE –  Jan 7th 2010


After publishing this article, my fellow consumer advocate Steve Rhode over at getoutofdebt.org mentioned that I should check out Lending Club .   After doing so, I can say that I am impressed with what they are doing over there. Lending Club is a peer to peer lending network.  Essentially they match up investors with borrowers and cut the bank out of the equation.  If you are in need of a debt consolidation loan of $25,000 or less, and have good credit (above 660 Fico) then I recommend that you head over to Lending Club and check them out.

If you could take out another loan on your house to pay off your credit card debt would you do it? Please share your thoughts HERE

Be sure not to miss out on any of my future articles. Have them delivered directly to your inbox the moment I publish them.

Please help other consumers and share my article via Twitter, Facebook or your favorite social network by clicking one of the icons below.

About Damon Day

As a Debt Coach and a Financial Advocate, I have saved my clients Millions of Dollars by exposing the debt relief scams that other consumers fall victim to. I work directly for my clients to create custom debt relief strategies based on their own unique circumstances. Consumers who speak with me first, come out far ahead of those who don't, every single time. Guaranteed. +Damon Day

3 Responses to “Unsecured Debt Consolidation Loans – Do they still Exist?”

Read below or add a comment...

  1. Lorrette (1 comments) says:

    Hi There Damon

    You kindly visited my site and left a comment so, as I always do, I in turn have visited yours to do the same. I must say though, I am more than impressed with the quality and standard of advice that your site offers.

    I have sent a couple of your posts and URL on to a few I know who desperately need exactly the advice you are offering. Nice work.

    Celebrate Life
    Lorrette

  2. Damon Day (116 comments) says:

    Hello Lorrette,

    Thank you for taking the time to come by and visit my site. I have been working hard on the blog the last few months to get as much information out as I can. I appreciate you passing on my site to a few of your friends. A large part of my business is referrals and word of mouth. I do have a Qualified Referral Partner Program for other Bloggers and Professionals. Contact me via the contact Damon form on this site or shoot me an email if you would like further information about the referral program. Thanks again for stopping by.

  3. Nick Chertock (2 comments) says:

    Damon: Great article on this topic. It is true that consumers are using these terms like credit counseling and debt settlement and debt consolidation interchangabely, and the internet marketers have bid up the value of those keywords. There is little straightforward information online about credit counseling, but I can see with your article that you are providing legitimate insights.
    .-= Nick Chertock´s last blog ..Diablo Country Club in Sept 2009 =-.

  4. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Cheers! Loads of material.

    cheap gerneric viagra kids forced to take viagra
    generic viagra 100mg
    viagra cialis levitra reviews – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  5. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Cheers. Fantastic information.

    oral jelly viagra generic sample pacs of viagra
    generic viagra 100mg
    viagra analy – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  6. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    You’ve made your point very well!!

    viagra in woman chinese viagra buy
    generic viagra
    which works better viagra or cilas – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  7. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Kudos. A lot of forum posts.

    alternative for viagra reviews for viagra cialis and levitra
    buy generic viagra
    viagra en ligne – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  8. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Amazing a good deal of terrific information!

    viagras time effect steroids viagra
    cheap viagra
    viagra merchant – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  9. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    You’ve made your position very nicely!!

    viagra free sites find search pages employee drug testing viagra
    viagra generic
    viagra risk – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  10. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Terrific facts. Regards!

    generic viagra 25mg herbal viagra uk
    viagra for sale uk
    okean viagra mp3 – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  11. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Cheers, Terrific stuff!

    european viagra commercial teen with viagra hardon
    generic viagra 100mg
    viagra cartoon – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  12. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Awesome facts. Regards.

    viagra testosterone mail order actress in viagra commercial
    generic viagra 100mg
    viagra 50 mg side effects – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  13. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    You mentioned this adequately!

    viagra samples viagra viagra edinburgh search pages online
    viagra online
    viagra recipes – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  14. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Thanks a lot. I value this!

    bull dog viagra gerneric viagra
    viagra without a doctor prescription
    cocaine interaction with viagra – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  15. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Truly lots of terrific material.

    cheap online generic viagra womend viagra
    generic viagra 100mg
    stallion viagra – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  16. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Wonderful stuff. Regards!

    does viagra cause depression or anger 2 free viagra
    buy viagra
    cialis viagra levitra – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  17. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    This is nicely said. .

    buy viagra prescription online cheap viagra uks
    viagra for sale uk
    viagra web site – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  18. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Thank you, Terrific information.

    cheapest viagra uk stroke impotence viagra
    buy viagra online
    viagra misuse – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  19. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Information very well taken!!

    viagra dallas no prescription online viagra discount 800 number customer service
    viagra 100mg
    viagra free – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  20. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Truly loads of great knowledge.

    teen boys taking viagra viagra adverse
    viagra pills
    buy real viagra online – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  21. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Nicely put. Thanks a lot!

    coffee laced with viagra viagra over the ocunter
    viagra 100mg
    can viagra be taken with norvasc – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  22. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Point nicely used!.

    can drug happened it miracle viagra generic viagra is safe
    buy generic viagra
    oral jelly viagra – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  23. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Thanks! Loads of stuff!

    viagra for sale without a prescription viagra find online pages edinburgh free
    viagra for sale uk
    viagra patent infringement reexam – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  24. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Kudos. I appreciate this.

    viagra sites find search computer viagra and valium
    cheap viagra
    viagra sildenafil citrate information – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  25. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Really plenty of helpful advice.

    viagra online in canada buy viagra online url
    generic viagra online
    compare levitra and cialis and viagra – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  26. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Nicely put, Regards!

    viagra no perscription usa generic 500mg viagra
    viagra pills
    viagra and pacerone used together – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  27. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    You suggested this wonderfully.

    discussion of generic viagra where to purchase viagra
    generic viagra online
    viagra motorcycle – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  28. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Awesome data. Thank you!

    headache viagra what viagra dosage should i take
    viagra 100mg
    viagra marketing tools – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  29. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Useful advice. Kudos!

    ugr 50 viagra whatdoes viagra do to a girl
    generic viagra online
    viagra alternive – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  30. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    This is nicely expressed. .

    prank call fake viagra prescription viagra carvedilol interaction
    viagra pills
    levitra cialis viagra online – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  31. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Factor certainly applied!.

    will viagra lower your blood pressure caution funny viagra
    viagra 100mg
    cheap viagra sales – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  32. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Thanks! Plenty of content!

    viagra type products viagra versus lavitra
    buy viagra online
    viagra canadian prescriptions – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  33. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Amazing loads of useful facts!

    does generic viagra less sildenafil citrate combining viagra and cialis
    buy viagra online
    viagra blue big love – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  34. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Nicely put. Appreciate it!

    generic viagra china international shipping order viagra
    viagra pills
    does viagra work with bp meds – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  35. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Great info. Appreciate it!

    herbal viagra fda herbal forms of viagra
    viagra 100mg
    viagra cialis prescription online – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  36. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Fine write ups. Cheers.

    ref hth q viagra viagra blue genuine
    buy viagra
    subaction showcomments viagra smile blog – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  37. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Incredible quite a lot of good information.

    viagra cialis soft uk get discount viagra online
    viagra for women
    viagra as ergogenic aid – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  38. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Kudos. Lots of advice.

    does viagra improve ed over time does viagra help with jet lag
    generic viagra
    viagra pakistan – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  39. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    You actually expressed that effectively.

    viagra tylenol viagra online mastercard accepted
    generic viagra online
    viagra cancun – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  40. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Good posts. Thanks!

    using viagra on house plants viagra brand naes
    viagra online
    crack cocaine and viagra – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  41. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Nicely put. Cheers.

    is viagra safe for diabetics latest news side effects viagra
    generic viagra 100mg
    watermellon and viagra – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  42. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Regards! Awesome stuff!

    viagra genetic honest place to buy viagra
    generic viagra
    best place to get viagra – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  43. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    With thanks! I value this.

    fedex viagra no prescription viagra didn’t work
    viagra online
    cheap viagra walmart – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  44. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Nicely put, Appreciate it!

    viagra vascular kamagra viagra sildenafil
    buy viagra online
    dog on viagra – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  45. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Incredible loads of useful knowledge.

    buy phentermine viagra pharmacokinetic of viagra
    generic viagra 100mg
    delaware caverta generic viagra veega – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  46. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    With thanks. Lots of info!

    is viagra from india safe viagra pulmonary hypertension
    viagra pills
    how much for viagra prescription – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  47. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Thanks a lot. Awesome information!

    what pills work like viagra pharmacy viagra fuerteventura
    viagra for sale uk
    viagra expiry date – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  48. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Lovely data. Many thanks!

    proper dosage of viagra comparison viagra and levitra
    generic viagra
    store location generic viagra – https://genericviagramsl.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  49. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Position well used..

    viagra nils patent on viagra
    generic viagra
    buy viagra paypal – https://genericviagrantx.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

  50. LarryThasp (52 comments) says:
    Your comment is awaiting moderation.

    Nicely put, With thanks!

    when does viagra go off patent before after pictures of viagra
    viagra online
    viagra eye problems – https://genericviagrarcp.com

    GeraldliC
    Dwaynenoulp
    Kevinbence

Leave A Comment...

*

Notify me of followup comments via e-mail. You can also subscribe without commenting. If you use the commentluv feature to share my article with one of the provided social media share buttons, you will receive a Do Follow link back to your site. If not, your links will become Do Follow after you have 4 approved comments on this site.