Taking a loan to pay off other loans is called debt consolidation. In this particular procedure one take a secure loan with low interest rate to pay off other loan with higher or fix interest rate. Debt consolidation is simply from a number of unsecured loans into another unsecured loan, but in most of the cases it involves a secured loan against some asset as a security or guarantee. In such case a mortgage is secured against the house. The risk to the creditor is low because he has the collaterals in shape of the house so the loan paid also has the low interest. There are many companies offering free debt consolidation consultancy on the internet.

These are the days with low interest rate and trend of take every thing whether on cash or credit, this provoke customer to by more and more on credit which lead to take additional debt to ease existing credit consolidation affliction.    This aims to consolidate numerous higher-interest credits into one easier-to-handle and less-costly package. One has to be very careful of what looks to be a quick fix. You are getting a suggestive relief not a cure for credit.  This fighting fir with the fire situation can take several forms. There are credit consolidation loans, zero balance transfer to the credit card and home equity credit or lines of credit. 

It is proven by a survey report that 70 percent of the American people who took the home equity loan usually end up with a line of credit cared debts to be paid which definitely of great burden or some time double at the end of two or more years. Statistics underscore a major problem with debt consolidation; it feeds upon the tendencies that you got in the trouble at first place. To have a debt to pay another, adds fuel to the fire and consequently it is your money which is burning.  

If there is a heavy amount you have to pay and you are under a huge burden and yet looking another debt to pay all the previous means lesser are the chances that you will get the desired low interest rate you are looking forward seen in any advertisement.

If you are at the end of the debt rope and you swear to fix it up this time debt consolidation may prove to be a good decision despite its risk.

There are more people who are in the favor of debt management instead of a debt consolidation loan. Only in the situation if you cannot handle your problems adequately by yourself then there are lot of credit counseling companies. You should take help by the professionals working through the debt consolidation companies to manage all your debts. Mostly people with huge burden of debt do not even exactly know that in how much debt they are a debt manager can help those by setting a debt consolidation program to face all the obligations one have. Credit counseling companies also lead and refer a path to consolidate debt rather to racking up it more. In return of all the services which a credit counselor is proving and working with your creditor to reduce payment plans a credit manager will ask you to give up all of your credit cards. Moreover debt consolidation is not without its costs.