Debt consolidation is a financial strategy that combines multiple debts into a single loan or payment. This can simplify managing finances by reducing the number of payments a person has to make each month. Often, the new loan has a lower interest rate, which can help save money over time. People typically use debt consolidation loans or balance transfer credit cards to achieve this. By consolidating debts, individuals may also improve their credit score if they consistently make on-time payments. However, it’s important to consider fees and terms associated with the new loan to ensure it’s a beneficial move.