Bills, loans, fees and expenses that exceed your income will usually lead you into debt. You try hard to repay these loans and bills, but in the end, you usually end up taking extra loans with the hope of covering these loans. Eventually, the only option you usually have lies in seeking the help of financial advisors like those found in debt consolidation companies and debt settlement companies.A debt consolidation loan is a loan which is meant to cover all the debt that you have. All the loans and credit card debts that you have are merged into this single debt consolidation loan. The benefit of a debt consolidation loan is that instead of paying off all the individual creditors you have, you just have to make a single payment to the debt consolidation company every month. It is then up to the debt consolidation company to make payments to your creditors with the money that you hand over to them. This way, you don’t have to face the nagging and questions of your creditors as it is the debt consolidation company that meets them.There are basically two types of debt consolidation loans; secured and unsecured debt consolidation loan. With the secured debt consolidation loan, you are provided with the debt consolidation loan only if you provide some collateral for the amount borrowed. This collateral can be any asset of yours; your home, bank account or car. With the secured debt consolidation loan, you can borrow as much as you need as the debt consolidation company will sanction the money to you as you provide them collateral.In a secured debt consolidation company, if you don’t pay up the loan at the end of the term of the loan, the debt consolidation company has the right to take over whatever you place as security. This is why this loan is of a lower interest level, and the loan amount of a higher amount than the unsecured debt consolidation loan.As the name implies, in an unsecured debt consolidation loan, there is no security or collateral placed for the loan. As there is no collateral here, the interest rate for this loan is usually on the higher side, and very often, the debt consolidation company does not sanction the exact money you apply for. They usually allot an amount lower than what you ask for so that there is not that much loss if you fail to repay their money. This is also why they also charge higher interest rates, so that they receive more money every month, and work their way in covering the principal amount they provide you as a loan.So it can be seen that an unsecured debt consolidation loan is comparatively safer than a secured debt consolidation loan. Though you may not get the amount of money that is needed to repay your loans, you don’t have to worry of losing your house or car in case you fail to repay the debt consolidation loan.