Debt consolidation is the process of taking out one loan to pay off multiple other loans or debts. The goal is to secure a lower overall interest rate and to simplify the repayment process by servicing only one loan or debt. Debt consolidation can be a useful strategy for paying down debt more quickly and reducing overall debt. However, it is important to understand why you are in debt and to make a budget before considering debt consolidation. There are several different types of products that allow you to consolidate debt, including credit card balance transfers, debt consolidation loans, and home equity loans. It is important to keep in mind that the loans you take out to consolidate your debt may end up costing you more in fees and rising interest rates than if you had just paid your previous debt payments. Before considering debt consolidation, make sure your spending habits are in check, that you’re making your current payments on time, and your credit score is in good shape.