A debt consolidation loan is a type of personal loan that is used to pay off multiple debts, typically with higher interest rates, into a single loan with a lower interest rate. This can simplify the repayment process and potentially save money on interest charges. Debt consolidation loans can be a good option for people who have multiple debts with high interest rates and are struggling to make the monthly payments.
There are several benefits to consolidating your debts into a single loan. First, it can save you money on interest charges. If you have multiple debts with high interest rates, you may be paying more in interest each month than you would if you had a single loan with a lower interest rate. Consolidating your debts can help you reduce the amount of interest you pay each month, which can free up more money in your budget.