1. Debt Consolidation Loan
A consolidation loan consolidates numerous debts into a single debt. If you have several high-interest credit cards or any other forms of debt with payments past due, you can use a consolidation loan to consolidate them into one simple loan. The purpose of the loan was to pay off all previous debts, after which the borrower is responsible for paying back the consolidation loan. The interest rate on a consolidation loan is usually lower than other obligations, and there’s just one monthly payment to worry about rather than many smaller payments over time.