Debt consolidation is the action of combining several loans or liabilities into one loan. Most people consolidate for a lower interest rate, or the simplicity of a single payment.
In theory, debt consolidation is often considered when someone has credit card debt, because credit cards carry a much higher interest rate. And most debt consolidation loans are secured through property as collateral (usually by a home refinance). The end result being lower interest/payments allowing the debt to be paid off sooner.
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