Debt consolidation loans can be categorized into the following two main categories, depending upon whether a collateral is tied with the loan or not:
- Secured Debt Consolidation Loans
- Offered against collateral security
- Helps the borrower to save money paid as interest
- Unsecured Debt Consolidation Loans
- Offered without the need to put forth a collateral
- Carries a higher APR as compared to the secured one
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