Debt consolidation is a solution to stopping your debt from spiraling out of control. Debt consolidation, through a debt consolidation loan, does not reduce your debt; it merely eliminates multiple high interest rates associated with debt from various lenders by consolidating them into one new lower interest rate loan A debt consolidation loan is one solution to consolidating your debt. In this situation, you basically get a loan to pay off all your various debt or get a better type of loan (changing from an ARM to a fixed-rate loan).
There are also debt consolidation solutions that do not offer a new loan but instead offer debt consolidation services, where a provider works with you to lower your monthly costs or to settle your debts for a discount from the face value of the debts. You can compare your debt consolidation options by reviewing the Bills.com debt comparison.