If you have debt and are considering consolidating with a loan an equity mortgage is pretty much going to be your only option for a loan. But there are several things that you should know before you begin looking for a loan. In most cases there are alternatives that will make a better option than a loan. And with all the benefits that loan companies talk about, there are just as many or more negative factors in getting a loan.

Debt consolidation loans are equity mortgages in 99% of all cases. Most financial institutions do not offer unsecured loans at all. It is possible you could get one through a credit union, but you would probably need a FICO score of close to 800. And if you have a score like that, you most likely do not have credit card debt. About the only place that you can get an unsecured loan easily is through a payday lender. With this type of loan you are looking at a short term loan with a very high fee. These loans are bad news, especially if you are dealing with debt problems.

Almost all debt consolidation loans are secured with your home. This means you have to have equity in your home and be credit worthy. Even though the interest rate on your debt consolidation loan will be less than those on your credit cards, this is an option that is not considered a good move by debt relief experts. If you do not pay your credit cards, your lenders can harass you with phone calls and can try to garnish your wages, if you are working. But if you have a debt consolidation loan and you do not make your payments, your lender can foreclose on your home if they see fit.

One of the biggest problems with get a loan to consolidate debt is most people still cannot control their spending. And now they have credit cards with available credit on them. Statistics show that many people that opt for a debt consolidation loan will have credit card debt again in less than a year. Don’t get me wrong…a debt consolidation loan is a viable method for getting out of debt. But in my opinion, this type of debt relief is extremely risky. You should give careful consideration before you secure your credit card debt with your home. A nonprofit debt management plan should be your first consideration for debt help.