Definition
Combining multiple debts into one loan with a single monthly payment, often at a lower interest rate. It simplifies managing your debt.
What to consider
- Combining debts can simplify your monthly payments.
- Shop around for the best interest rate on the new loan.
- Make sure consolidation will actually lower your costs.
Real world scenarios
- Frank combines multiple high-interest card balances into a single loan with a lower rate, streamlining monthly payments.
- Eva’s consolidation plan helps her track progress toward becoming debt-free, rather than juggling several accounts.
- Tyler chooses a reputable lender to consolidate debts, improving his chances of securing manageable terms and regaining financial stability.
Related terms
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