As mentioned previously most debt consolidation arrangements and loans are done using a secured loan system meaning that the borrower must pledge an asset in order to obtain the debt consolidation loan. If however the borrower doesn’t have access to an asset that he/she can use for the loan then most agencies will be able to provide an unsecured debt consolidation loan. The only problem with that is that unsecured loans are much more sensitive to bad credit history and also have a higher interest rate pegged to them because of the higher risk that the lender sees.

Unfortunately most people who don’t have a secured asset to pledge for a debt consolidation loan will get turned down asking for a unsecured loan unless their credit history is quite good. Another smart option is to apply for a higher limit low interest rate credit card. These credit cards are generally no-frill options which most lenders do carry and don’t have any reward system attached to them. The interest rates are almost always between the 8-12% mark which is definitely better than any rates offered by normal credit cards. You should then arrange a zero percent balance transfer of all your higher credit card balances into this card. This can potentially save hundred of dollars each month and can amount to a very hefty annual saving.

There are some things in your life which you can be loyal towards and later receive rewards for. This however is not true when it comes to credit cards. An unhealthy loyalty to your old credit card provider simply will not do you any good in the long-run as that particular card that might have fit your spending pattern before might not now.

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