Many consumers find themselves in the position that this writer has asked about. He wants to consolidate $40000 without home equity to use to secure his loan. A secured loan would give him a better interest rate and lower his overall costs for the loan. The chart at the bottom of this post shows the difference in the amount of interest paid for someone paying credit card rates vs. an unsecured loan and also one that is secured over a 20 year period. The period and interest rates were chosen randomly for illustrative purposes only, but are typical of what consumers would pay. There is over a $60,000 difference in the amount of interest paid over the term of this loan which is substantial. It illustrates why that you want to find the lowest interest rate possible.
A lower interest rate also affects the monthly payment significantly as well. There is over a $250 difference in the monthly payment between the highest interest rate and the lowest rate. Anyone can use $250 a month to pay bills etc as well as to pay off a loan more quickly.
Consumers should look for loans to consolidate their debt with low interest rates. While they will not find loans that are as low as secured loan rates, there will still be significant savings for them vs. credit card interest rates. While this consumer has a car loan which has a competitive interest rate, there is the advantage as well of combining all payments into one easy payment. He should remember that he likely will not have his car after 20 years and if he consolidates this debt he is in effect deferring payment on a depreciating item which is not considered the best approach.
Financially he would be better off consolidating his credit card debt with a low interest unsecured loan, keep his car loan separate and use the money he is saving to retire the car loan as quickly as possible.