Debt Consolidation is the process of taking out one loan to pay off other debts usually when you are unable to pay all the minimum payments for the different outstanding debts or so you can get a lower overall interest rate. This is used in a variety of ways but is mainly used to consolidate multiple student loans to one loan payment for ease when you come out of college. The other most popular task is done when a person places many of their high interest credit card debts into one large loan with a smaller interest rate.