Debt consolidation is a process undertaken to reduce the monthly payments on debt by extending the time in which to pay the overall amount owed. Sometimes, debt consolidation applies to one large debt such as a student loan. Other times, debt consolidation refers to a service provided by companies that bring a person’s many debts together, pay them off, and then negotiate a monthly principal and interest payment between their company and the debtor. This type of debt consolidation has many benefits to the person in debt. First, it often removes the debtor from the harassment of multiple creditors. Second, it lowers the monthly payment of the person in debt. Third, it makes the debtor responsible to just one creditor instead of many.

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