Debt consolidation is a process of combining debts into one loan or repayment plan. Debt consolidation can be done on your own, with a financial institution, or through a counseling service. Debt consolidation is often associated with consolidating multiple credit card balances or student loans.
Student loans are often consolidated in order to secure a lower interest rate. Combining the balances of multiple loans into one single loan. Student loan consolidation is often used as a strategy for reducing monthly payments by extending repayment terms and/or acquiring a lower interest rate for some or all of the loan balances.