Consolidating debt can get you out of financial trouble — but it can also land you in a tough spot.
Stack of past due bills.
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Consolidating debt is the process of borrowing more money to pay off existing debt. Many people use debt consolidation as a tool to help repay what they owe and to simplify the repayment process.
Debt consolidation can make paying back loans simpler because you can pay off multiple existing creditors with a single new loan — leaving you with just one monthly payment instead of multiple payments to different lenders. It could also help you reduce the cost of repayment if you can get a better rate on your new loan than youre currently paying.
While there are clear pros to debt consolidati…
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