A variety of financing firms will also loan you money against lawsuit claims, lottery winnings, and annuities. Lower interest rates will likely make the monthly payment lower and more affordable.

Sometimes, the interest payments are even tax deductible.

Accepting a no interest, or low interest, introductory rate on a credit card is often used as a substitute for an unsecured personal loan for debt consolidation.

This may result in a payment that is not low enough to make a difference in your financial situation.

Using balance transfer options on no-interest or low-interest credit card offers are tricky.

The term of a secured loan may also be longer than the term of the debt obligations that you consolidated.

This could cause the total interest that you pay over the life of the consolidation loan to be greater than the interest would have been on the individual debts, even though the monthly payment is lower.

Whether you are teetering on the edge of bankruptcy or just trying to better manage your finances, you can’t help but notice all the advertisements touting debt consolidation. Read on to learn about the different debt consolidation options and the pros and cons of each.

(To learn about other ways to handle debt, see our Debt Management topic area.) With debt consolidation, you get a single loan to pay off all of your smaller loans, thereby leaving you with just one monthly payment rather than several.

You can take out a car loan, using your automobile as collateral.

You can also use other assets as security for a loan.

When you take out a secured loan, such as a mortgage or a car loan, you pledge certain property, such as your home or your car, to secure the repayment of the loan.