ubious financial products are often geared to appeal to us on an emotional level. We buy them when we feel threatened.

Similarly, debt consolidation loans appeal to people who are feeling harassed by creditors or overwhelmed by debt payments. But most of these loans are dangerous, says credit consultant Gerri Detweiler, because they cost too much and because they can put a black mark on your credit record.

Debt consolidation, if done properly, can allow you to simplify your bookkeeping system and to potentially pay off your loans at an overall lower interest rate. But it sometimes requires offering items you own as collateral in case you can't pay it off and can lead to pushing you even further into debt.

There are two types of debt consolidation offers. The first comes from a finance company, which will offer to loan you the money to pay off your bills and owe just one creditor - them. The problem here is that finance companies charge sky-high interest rates. That means the finance company has an incentive to stretch out your payments to increase the interest. Worse yet, many creditors consider finance companies the lender of last resort. So you can actually damage your credit rating by using a finance company even if you're paying on time.

The second type of debt consolidation loan is offered by a bill-paying service, which can be even more dangerous. These services charge you a fee - perhaps 10 percent of your debt - to pay your bills each month. They simply act as a bookkeeping service. Bill-paying services do not consolidate your debt. Some of them even neglect to pay your bills on time, Deitweiler says.

Many credit-card issuers offer new cards with low initial teaser rates in the range of 5.9 percent, suggesting that you consolidate your debt and pay it off at that low rate. But Jane King, a financial planner in Boston who has evaluated these offers for a number of clients, says that, "the fine print usually reveals additional rates and fees." Furthermore, the rate is a temporary one that doesn't last long enough to get the bills paid off.

So what can you do if you owe too much to too many creditors? The best option for consolidating debt is to roll it into your mortgage, King says. Because your home mortgage interest is tax deductible, you could borrow at an effective rate less than the stated interest rate. Let's say you're in the 28 percent tax bracket. That means you can deduct 28 percent of the interest paid on that loan at the end of the year.

"The debt attached to a residence is the only debt to have," King says.

Since interest rates are relatively low now, King suggests locking in a fixed rate. You can do that by refinancing your home. Or you can take out a home equity line.

"If you don't want to marry up with 30 years of debt for either arithmetic or emotional reasons, look at the home equity line," King says. "At these rates, you want to rent as much of the bank's money for as long as you can."

Of course, many people who are head over heels in debt do not own a home or do not have enough equity to qualify for a loan. If you're in that situation, you may want to consider calling one of the 1,300 offices of the Consumer Credit Counseling Service. The service can be reached at 1-800-388-2227.

Counselors in these offices, which are part of the National Foundation for Consumer Credit, a nonprofit organization set up to educate, counsel and promote the wise use of credit, helped 1.2 million families in 1996, according to Ken Scott, a spokesman for the group. About one third of those who come in need a debt management program.

Credit counselors will help you with budgeting whether or not you are in trouble. Budget counseling is free. The average cost to consumers who use these programs is just $9 a month, Scott says.

If you and the counselor decide you need a debt management program, you must stop using your credit cards. The counselors will negotiate with your creditors for lower monthly payments and sometimes for lower interest rates. Those in the debt management program make one monthly payment to the credit counseling service, which distributes that money to creditors.

Still, the credit counseling service can be a great boon to those who feel panicky about their debt and unable to cope with the consequences. "One of the greatest benefits of this service is peace of mind," Deitweiler says. "It can help you get a good night's sleep and get back on track."