Debt Consolidation

The term debt consolidation refers to the practice of taking out one loan in order to payoff others. In most cases, the borrower will be able to combine the consolidation with a restructuring of the debt, including a reduction in the balance, reduction of interest rates, and/or extended terms.

Instead of trying to balance multiple creditors, the borrower has one payment to make. The payment amount is determined by what the borrower can afford, so that he or she can move forward toward becoming debt free, rather than falling into further debt.