When people are struggling under debt, there are many options available to them. Debt consolidation is something that has been thought of to be the best way out of debt. But even the best ways out of debt are not without risks. Debt solutions are not something that should be approached blindly, knowing the pitfalls of debt consolidation loans may help you decide if they are the right solution for you.Asset Risk:Most debt consolidations want collateral. This collateral can be anything you own with value. Equity in your home is the most common asset that lenders will want to use. When you use this sort of collateral, you can risk losing the assets you have put up. What happens if you lose your job, are injured, or any number of things that may cause you to miss payments? It is important to remember, you could lose any of the assets that you put up as collateral, if you default on the loan.No Counseling:This is a failure of many lenders. They provide a tool but no explanation of how to use it. People that are in debt because of their own financial irresponsibility do not change their habits easily. If they do not change how they spend and budget money, they will end up in the same situation again. The borrower may see extra money every month in savings every month. Without discipline, this money could easily be used irresponsibly, leading to larger financial problems.Unfavorable Terms:In some cases, predatory lenders may not give very favorable terms to your loan. This means that your loan agreement is for a shorter period of time. For larger loan amounts, this can actually drive up your monthly payment and increase your debt to income ratio. These are most common from non-bank or non-credit union affiliated lenders. People with low credit and no assets are often pushed into these loans without understanding the consequences.Loan Rates:Just like housing, loan rates for consolidations can be used to attract people. Beware of any group that offers 0%APR, or lower than normal interest rates. They normally will make up for the low introduction rates, by charging a much higher interest rate. Do not sign anything that is adjustable. Right now interest is at an all time low, so it will most likely go back up. When this happens, you could end up paying more than you did before.Wrong Loans Consolidated:Many people want to consolidate all debts. This is not possible with some debts. You may also find that you are not really saving money on some of your debts. You are best served when your highest interest rate loans are covered. You should be selective about what it is covered by the consolidation. It is important that your highest interest loans are taken care of first.Would you like to pay less than 50% on your debt? You can with debt settlement. Debt Settlement AdvantagesWhy take needless chances with your financial life?