So long story short, I've got about $20,000 in unsecured debt between a personal loan of $15,000($14,000 remaining principle) with the rest spread between three credit cards. I initially got the personal loan with the intention of buying a car while also paying down my credit card debt to lower my utilization. I ended up spending a bit more than I hoped on a car and didn't have enough to eliminate all of the credit card debt. On top of that, AmEx lowered my credit limit substantially after I paid the bulk of that card off. As such, my utilization is around 85% when it would've been more around 40%.
Now a few months later, I've been considering getting a secured loan with my car as collateral for the full amount of my debt to consolidate into a single payment. Currently, the interest rate on all of the current debt is between 20% and 24%. I've spoken with my loan company and there would be a small amount of interest required(~$100) with the payoff amount and no other fees or penalties. I haven't yet applied for any loans, but I've seen secured loans for the amount I need with interest rates between 9% and 14%.
Current loan: $15,000 principle, 22% interest, 48 month term, $477 monthly payment
Credit card debt: $6,500 total, 21%-24% interest, ~$200 monthly minimum payments
New loan: $23,000 principle, 9%-14% interest, 60 month term, $485 - $540 monthly payment
To the amateur financial mind, this seems to make total sense. Lower payment, lower interest rate, lower credit utilization, and raise credit score.
So my question is -- does it make sense to consolidate into a secured loan at a much better interest rate? Are there any major reasons to be wary of opening up a secured loan in this way?