Simply put, debt consolidation is the process of combining multiple debts into a single one. These debts are normally borrowed at high interest rates, so the idea for most people is to consolidate them at a lower interest rate. This lowers the cost of borrowing, and adds the extra convenience of dealing with fewer creditors and individual bills each month.
Debt consolidation works best when you take a number of unsecured loans and combine them into one secured one, which usually means having collateral (like a house) to put up. A secured loan will normally carry lower interest rates, which offer the most savings for the consolidator. That said, there are programs available for people who do not own a home or other assets to qualify for a secured loan, though the savings may not be as large because the interest on the consolidated loan may be higher. If you have a high credit score, more savings are possible. Speak with a credit repair specialist to learn how you can raise your credit score and save more by consolidating.
If you're currently paying high interest on more than one account, whether they are credit cards, medical bills or just about any other type of unsecured loan; debt consolidation is likely a good option for you provided you qualify for a lower-interest loan. The better interest rates will allow you to reduce your total payments and pay off your debts much faster and with less hassle.