A secured debt consolidation loan makes reference to taking out one large loan to pay off other smaller loans. This is meant to enable people improve their credit rating history, as well as offering them the opportunity of doing away with debts. In time, as costs are spread out over a longer period of time, people not only will have improved their credit rating, but they will also have managed to pay all the owed owed, this way making the first step to a new life.What is a secured debt consolidation loan?A secured debt consolidation loan means taking out one large loan to pay off the smaller ones. It does not matter whether the smaller ones were secured or unsecured. All that matters is that this new loan is indeed secured. This means that the new loan has collateral. This collateral item is most commonly a house. This is useful if by any change the new payments, which is actually more reasonable and manageable cannot be paid.How does this work?If you choose a secured debt consolidation loan, the collateralization of the loan provides people with a lower rate of interest. That is if you place collateral you will have a lower rate of interest. This happens because the risk of the lender is reduced, so as a bonus the company agrees to lower the rate of interest. This plus the reduced monthly payment enables you to start your new life, worry free.Rather than trying to pay off the minimum amount for each debt, this kind of loan could and will reduce your debt to one reasonable manageable monthly payment. Once the money owed is transferred into one loan, your monthly outgoings are reduced. Because of all these advantages, John Liad recommends taking a secured debt consolidation loan.