Debt consolidation loans are a type of personal loan that allows you to combine multiple debts into a single loan with a fixed interest rate and repayment period. The goal of debt consolidation is to simplify your monthly payments and potentially reduce the overall amount of interest you pay over time.

When you take out a debt consolidation loan, you use the loan funds to pay off your existing debts, such as credit card balances, personal loans, or medical bills. You then make one monthly payment to your debt consolidation loan lender instead of multiple payments to different creditors.

Debt consolidation loans can be secured or unsecured. Secured loans require collateral, such as your home or car, to secure the loan. Unsecured loans do not require collateral, but they typically have higher interest rates than secured loans.