If you’ve been turned down for loans because of bad credit, you may be wondering if it’s possible to get a loan at all. Fortunately, you may qualify for a particular type of loan, known as a Secured Loan. These loans “secure” the debt with some type of collateral, such as a house, car or other expensive possession. Here’s how to get one:

PICK YOUR COLLATERAL:

The collateral you choose for your loan should be something valuable enough to cover the cost of the amount you plan to borrow–but it should also be something you’re willing to lose. That’s because, should you fail to make timely payments, the lender can repossess this item to “pay back” the loan. Many people use their house or car as collateral, which is acceptable if you know that you’ll be able to make the payments. Otherwise, you may want to consider using a boat, piece of jewelry or a pricey electronics item if it covers the amount you want to borrow.

PICK A LENDER:

There are lots of lenders who offer secured loans, including your local banks, online lenders and other financiers. Do an Internet search to find online loan companies, or ask friends and family for suggestions. Just remember to compare a few different lenders before choosing one, since you’ll want to pick the one with the lowest fees, best terms and lowest interest rate.

COMPLETE THE APPLICATION PROCESS:

You’ll have to fill out a basic application, undergo a credit check and probably show proof that you own the collateral, such as the deed to your house or car. Be prepared to answer questions about your income, bank balance and investments, too, since most lenders want a complete picture of your financial life before allowing you to borrow money. Although a Secured Loan is easier to obtain than an unsecured loan, it still requires some paperwork.

If you have less-than-perfect credit and a valuable asset, a Secured Loan can be an easy way to obtain quick cash. Just remember: You must make on-time monthly payments or you may possibly forfeit the item you used as collateral.

Government debt consolidation loans are loans offered through various government programs to pay off multiple loans. This enables an individual to take care of one single monthly payment compared to 3 or 4 payments to different creditors. This is the principle of debt consolidation. Debt consolidation also helps by lowering the interest rate by switching from unsecured debt to secured debt.

The federal government has various programs that help particularly students in debt to consolidate their loans to quickly reduce and eliminate their debt. Students typically have student loans, credit card debt, and medical bills that keep them in a state of high debt. The Department of Education pays off the original federal education loans and issues a new loan for the consolidated amount of the old loans. This is done as part of the Direct Consolidation Loan Program.

The Federal Family Education Loan (FFEL) Programs and the Direct Loan Program are programs that fall under the Higher Education Act (HEA) and allow loan consolidation. This works by issuing a new consolidation loan to the borrower that pays off the borrower’s existing loans. The borrower might have contracted the existing loans from various lending agencies, which have different terms, repayment dates and arrangements. Paying off these multiple loans with one loan and making a single monthly payment helps individuals effect timely payments at a lower interest rate. With a consolidated loan, the monthly payment amount is generally lower. Moreover, there is increased clarity as to the total term of payback, the exact interest rate charged, and the payment due date. In most cases the payback term can be increased to ease the payoff process and reduce the monthly commitments.

The government debt consolidation loan program has four plans for the borrower – standard plan, extended payment plan, graduated payment plan, and income contingent repayment (ICR) plan. Each of these plans has features that suit the situation of a borrower, thus providing the flexibility required of a debt consolidation and elimination program.