California Debt Consolidation Debt consolidation loans are not for everyone but for some they can solve all kinds of complicated problems. Before you decide to go the debt consolidation route then you will have to learn about them and see how they will fit into your particular situation. Each person's debts are different and in the end it will be up to you to determine if debt consolidations is really right for you. Debt consolidation is not always as simple as getting another loan to cover all of your debts. Oftentimes you will have to secure this loan against your home, similar to a mortgage. The lenders prefer to work with a secured debt in order for them to feel secure and safe. Most of those who are looking for debt consolidation do not have good credit and for them to lend you a large amount of cash when you have proven that you cannot be trusted to pay it back would be silly and so they make sure that if you do default on any payments they can still get the money that they are owed. It is one thing to owe money to a credit card company and have your credit get ruined when you do not pay on time but it is another thing to lose your home when you default. One of the things that many people like about debt consolidation is that they will be paying lower monthly payments. But the thing is that sure your payments will be lower but that only means that you will be paying longer. And by stretching out your debt you could be paying more money in interest rate in the long run. So even if your interest rate is lower that does not necessarily mean that you will be saving money. You may not be able to get a debt consolidation loan without putting up your home as security but that does not mean that you will not be able to get some other personal loan. If you can you can use that money to pay off your other debts you will be accomplishing the same thing, you will now have only one debt to pay off. If you have really terrible credit then getting another loan in order to pay off your debts is probably not such a good idea. The only lenders that will be willing to lend you any money will be those who charge an enormous interest rate. In the end this could actually cost you money instead of save it. Some debt consolidation loans are tax deductible but to find out if you will be able to deduct this you will have to talk to a tax expert in your local area.   Debt Consolidation Refinance: In a debt consolidation refinance, add the amount to be borrowed to your mortgage balance. The total is your new loan amount. An appraiser determines the value of your property to determine your Loan to Value (LTV). I have programs allowing you to borrow 80, 90, or even 100% of the value of the home in this Debt Consolidation Refinance.   Debt Consolidation Second Loan: A debt consolidation second trust is a useful tool if you have a low rate mortgage but want to use your equity to consolidate your debt.