Debt Consolidation

Debt consolidation combines multiple debts into a single loan, ideally at a lower rate. Instead of juggling five payments at five different rates, you make one — which simplifies your life and can cut your total interest.

The catch: a longer repayment term can mean more total interest even at a lower rate. And the biggest risk is behavioral — if you consolidate credit card debt but don't change your spending, you'll run the cards back up and end up owing both the consolidation loan and new balances. Consolidation is a tool, not a cure.