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Some people want to consolidate all their debts into one, and either get a loan for it, or refinance property they own to achieve it.  Debt Consolidation is one way to do that.  A consolidation company will ask you to bring in statements for all accounts owed, have you fill out a financial analysis to qualify, and then arrange financing or refinancing of property to achieve it.  This spreads the total debt out over a longer period of time, and the theory is that the payments are lowered because of that, making it easier for the client to make the payments.

The downside to this is this:  whether a loan or a refinance, the client is paying a lower interest rate, but over many more years.  This may be a short term solution, but long term, the client is paying way more interest over a longer timeframe.


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