InvestorQ : What is debt consolidation?
priya Shah made post

What is debt consolidation?

Swapnil Sarang answered.
3 months ago
It is a process under which a person takes a new loan to pay off all other consumer debts and liabilities. Under this, multiple debts are combined into a single debt such as a loan with a lower interest rate and favorable repayment terms. This could generally be used as a tool to deal with debts such as student loans, credit card loans, or any other liabilities. So, if you are stuck with so many loans in your hand, you could apply for a loan to consolidate those debts into a single liability and pay them off. All your payments will be shifted to the new loan until it is paid in full.

To get their loan converted, one can apply with their banks, credit unions, or other financial institutions. This will work for you when you have a good relationship with your lender and payment records with your institution. What if you do not have good terms with your financial institution? In that case, you can try exploring private mortgage companies or lenders. Creditors have their reasons to do so as debt consolidation maximizes the chances of debtor recovery. 

You can also explore companies which are specialized in debt consolidation that are willing to provide these services to their customers.