Debt consolidation is when a person obtains a larger loan to pay off a number of smaller debts. By doing this it ‘consolidates’ all of the debts into one loan payment.
People use debt consolidation to pay off smaller loans, credit card balances, bills, overdraft balances, anything that can be paid off.
Debt consolidation loans are issued by credit unions and banks and you must apply and be approved for a larger loan to be able to pay off the smaller debts.
By consolidating all payments into one simplifies life and makes it easier to make the monthly payments instead of paying multiple payments perhaps on different days.