When debt consolidation plays the right business word, in normal day-to-day life people often speak about debt credit loan. Both of them mean a way to take a new loan to pay back older loans. And yes, often it means to pay back several old loan and credit. Debt consolidation is often done to get lower interest rate pay back, so with one debt consolidation loan the customer can get lower interest rate or better terms. Some customers have ran into trouble with several high interest loans and they have no other chance, but to take a debt credit loan.
So, besides the lower interest rate, the other common reason for credit debt loan is other terms of contract. So customer may get a contract that will let him pay back the credit more seldom or in smaller amounts. For example, if the customer has had to pay 300$ (LOAN 1), 400$ (LOAN 2) and 500$ (LOAN 3), it makes 1200$ per month. But it may be, that customer has only 800$ extra per month to pay the old credit. So, eventually he will run into trouble, when there is no savings left. Then the debt consolidation comes to picture. With credit debt loan customer can drop the monthly payment lower. Customer takes a new loan to cover all the other credits from the past. In our example it could be that the monthly payment of 1200$ is dropped to 800$ (for instance). For customer that means a relief, he can take care of the loan. It often means, however, bigger loan amount. So if the credit that the customer had before were 25000$ together, now he maybe have to pay back 31000$ all together. But, at least he can take care of the loan.