Debt Consolidation
Debt Consolidation involves combining any debts you have into one single repayment. It can be used for any debts that you may have already. These can include loans, credit cards and store cards, and often are referred to as unsecured debts as they are not held against any assets.
Consolidation usually refers to the practice of taking out a single new loan. The money from this is used to pay off all your other creditors, leaving you with a single debt that is much easier to manage.
This means that, by consolidating your debts, you can instead ensure you have one reduced regular repayment on a lower rate of interest (as opposed to credit cards and store cards which can have very high interest rates).
However, while the lower repayments may seem attractive, there are disadvantages which can make the whole process off-putting. The loan may have to be secured, usually against your property. Because of their nature, secured loans can take decades to pay back - they can last as long as your mortgage. It is also worth checking the total amount that you will repay across this period, as it will usually be that case that you will eventually have to spend far more than you originally borrowed over the period of the loan.
Finally, and most importantly, under a secured loan, you could also lose your house or anything that you have used against it, as they can be repossessed if you do not meet the repayments.
If you decide to go for debt consolidation, you will need to ensure you have a strategy to avoid going into debt again while the repayments are being made otherwise you will be no better off than before you consolidated it all.