A personal loan for debt consolidation is a new loan you take out to pay off your existing debt. Effectively, you’re refinancing your old debt with the new loan.
A debt consolidation loan typically has a lower interest rate than credit cards, so your new loan may have a lower monthly payment than your current debt. That means you may pay down your debt faster with the debt consolidation loan. You also have just one monthly payment to keep track of, rather than the varying due dates and amounts of your current debt.
