# Debt Consolidation

*Borrowing & Credit — Finicade finance glossary*

Debt consolidation rolls several debts into one loan with a single payment, ideally at a lower rate and with a fixed payoff date. It works when the new rate is genuinely lower and you stop using the cleared cards. It fails in two predictable ways: stretching the term so the monthly payment falls but total interest rises, and consolidating unsecured card debt into a home-secured loan, which converts a debt that could be settled into one that can cost you the house.

**Also known as:** consolidation loan, consolidating debt

**Related terms:** [Personal Loan](https://finicade.com/glossary/personal-loan), [Balance Transfer](https://finicade.com/glossary/balance-transfer), [Debt Avalanche](https://finicade.com/glossary/debt-avalanche), [HELOC (Home Equity Line of Credit)](https://finicade.com/glossary/heloc), [Debt](https://finicade.com/glossary/debt)

Source: https://finicade.com/glossary/debt-consolidation