The main option, and probably the cheapest one is to apply for a mortgage loan. The interest rates charged for mortgage loans are the lowest rates on the loan market and the amount offered can easily reach the property's value. Moreover, the repayments schedules are extremely flexible. You can repay the loan in as much as 30 years and consequently, the loan installments can be as slow as you wish.

The mortgage loan option, though being the cheapest one, is not available for everyone. You may already have a mortgage on your home or you may not be willing to use your home as security of a loan. Both situations have different solutions, for those who already have a mortgage on their home, refinance home loans and home equity loans are the best options and for those who are not willing to use their home as collateral the alternative are unsecured consolidation loans.

Refinance Home Loans

How can a refinance home loan be used to consolidate debt? Simple, there are a kind of refinance home loans called Cash Out Refinance Loans that provide a larger amount of money than the remaining of the outstanding mortgage. While the main part of the new loan is used to cancel the previous one, the rest of the money can be used for any other purpose. In this case, the extra cash will be used for repaying other outstanding debts, leaving the borrower with a single loan to repay with much lower installments.

Cash Out Refinance Loans take advantage of the equity on your home. Equity is the difference between the property's value and the amount owed on it. A $100,000 Property with a $60,000 Mortgage has $40,000 of equity. If you continue paying the monthly installments and your mortgage debt is reduced to $50,000, the equity on your home would be $50,000 and so on. However, it is not always possible to refinance your mortgage as some mortgage loan terms won't allow it or will charge prepaying penalty fees which may turn refinancing too onerous. There is however, another way of taking advantage of the equity on your home.

Home Equity Loans

Home equity loans are secured loans guaranteed by the property's equity. They are usually called Second Mortgages because the same property that is the mortgage loan's collateral is also the home equity loan's collateral. They too have low interest rates due to being secured loans and provide almost the same benefits as mortgage loans. They are just a bit more expensive than mortgage loans but a lot cheaper than any other kind of loan.

Unsecured Consolidation Loans

Finally, for those who are not willing to use their home as collateral, unsecured consolidation loans are the only remaining option. Though unsecured loans are harder to get approved for, especially with bad credit, being a homeowner will boost your chances. This is due to the fact that the lender has higher possibilities of getting his money back in case you default if you own a property than if you have no assets at all.

Bear in mind though, that unsecured consolidation loans carry higher interest rates than secured loans. So, if you have a property you could use as collateral, you may want to reconsider and apply for a secured loan. Unsecured consolidation loans make much more sense for non-homeowners.