If you have a credit card debt of $2000, personal loan of $3000 and medical bills worth $1000, then the total unsecured loan amounts to $6000 ($2000 + $3000 + $1000 = $6000). Now if you take a home equity loan of $2500, you can easily consolidate the entire unsecured loan of $6000 into the home equity loan to reduce the total interest on your debts.

Note:
A credit card debt, Medical bills, Departmental store cards, Personal loans, Student loans and Bounced checks are considered as unsecured loan.