Debt consolidation loans combine multiple debts into a single, simplified payment. This can be beneficial for individuals with high-interest debts or multiple monthly payments, as it can help reduce interest charges and simplify budgeting.
Debt consolidation loans typically offer lower interest rates than credit cards and other forms of unsecured debt. They can also help improve credit scores by reducing the number of outstanding debts and lowering overall credit utilization. Historically, debt consolidation loans have been used to manage personal finances, but they can also be used for business purposes.