Debt Consolidation Companies
Home Equity Loans

If you own a home with significant equity (a portion of it already paid for), you may be tempted to take out a home equity loan to consolidate your unsecured debts.

This may be a bad idea because it converts unsecured debts to a secured debt. If you fail to make payments on a credit card, usually your creditor can't take away the stereo you bought with the card.

But if you fail to make payments on a home equity loan, you could lose your house.

That's because a home equity loan is simply what banks used to call a "second mortgage" under a different name.