Debt Consolidation is a term for a new/one loan to pay all your debt obligations. It consolidates multiple debts for one loan with fewer interest rates and time. In short, the amount you received from a new loan serves to pay off other debts.
Multiple debts happened when we have obligations such as credit cards, housing loans, personal loans, etcetera.
Types of Debt Consolidation
If you consider consolidating all your debts, then you got to make another decision. You have to decide what type of debt consolidation plan will you use. There are four main types of debt consolidation programmes, these are: