Debt consolidation means combining multiple debts into a single new loan or payment. Instead of juggling several credit card payments, personal loans, or other obligations, you roll everything into one monthly payment, ideally at a lower interest rate.

The appeal is obvious—simplicity and potentially lower costs. But consolidation isn't magic. It works best when you secure a lower interest rate than what you're currently paying and commit to not running up new debt. The risk is that payments that may have been flexible in the past are now fixed. Options include personal loans, balance transfer credit cards, or home equity loans. The real key to success isn't just consolidating—it's addressing the spending habits that created multiple debts in the first place.