Finance
In Louisiana, 'debt consolidation' using a home equity loan is a financial strategy where:
AMultiple property mortgages are combined into one
BHigh-interest unsecured debt (credit cards, personal loans) is paid off using a lower-rate home equity loan, using the home's equity as collateral✓ Correct
CThe government consolidates all outstanding mortgage debt
DMultiple properties are sold to pay off outstanding debts
Explanation
Debt consolidation using home equity converts high-interest unsecured debt to lower-rate secured debt backed by home equity. While this can lower monthly payments, it converts unsecured debt to secured — the home is at risk if the borrower defaults.
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