Debt consolidation is very simple. It occurs when you take out a loan to pay off other loans. You may decide this is the best thing for you to do for many different reasons. You may want to get a better interest rate or lock into a fixed rate. You also have the advantage of only one payment each month instead of several. There are many reasons to choose a consolidation loan but you need to consider debt consolidation pros and cons carefully before making your decision.This process usually involves a secured loan against some type of collateral. Some people use the equity in their home as collateral. This can sometimes work to your advantage because the collateral could help lower your interest rate somewhat because you are in effect agreeing for the sale of your home if you default on your consolidation loan. The lender may be willing to allow a lower interest rate because his risk is somewhat lower if you are putting your home on the line.Often people consider this type of loan because they have acquired a lot of credit card debt. Usually high interest rates go along with this debt. This happens because people tend to spend more than they make. If you have many different bills each month a loan of this type may help you out if you can learn to live on less.This is not a one step cure-all. Once you decide to get your bills in order proper spending is essential. You will have to overcome your poor spending habits or you can only look forward to more money troubles. Credit debt consolidation can certainly help you get on your feet if you act responsibly. The key to financial freedom is self control.Loan companies are aware of the mass appeal their services offer. However you need to realize they are in the business of making money and they will do everything they can to ensure they collect back the money you borrow. Do your research and select an honest company that plays by the rules.There are many good credit consolation companies out there to help you get back on your feet. If you are tired of paying all of those different bills each month consider debt consolidation pros and cons carefully. The fact that you will only be paying one bill each month is inviting as well. If you are not enjoying a fixed rate on your loans this can be inviting as well. Do your homework and decide what is best for your situation.