Debt consolidation is a form of debt refinancing that involves taking out one loan to pay off other loans. The process can secure a lower overall interest rate for the entire debt load and provide the convenience of servicing only one loan. While most of this debt is from mortgages and student loans, some of it comes from credit card debt. Credit cards and other unsecured credit can costs you a large amount of money each month in interest payments. This is money that can be used or saved. Getting a consolidated loan is not just so you only have to pay once a month. What it offers is a chance to pay off your entire debt at a lower interest rate. That means you can put down more than the minimum monthly payment and pay the whole amount off faster. The other advantage is that if you consolidate your loans soon enough, you can avoid – or at least minimize – the dent to your credit rating.

With the high interest rates credit card companies charge falling behind on only a few payments can lead to a seemingly insuperable debt load. This can quickly become stressful. To get rid of the burden you may get a second job or sell off your assets. There are other options to reduce the debt load.