Debt Consolidation is a technique by which a consumer lumps all of their debt together in an effort to obtain lower payments through lower interest rates, reduced/eliminated late fees, and perhaps longer terms. There are basically two types of debt consolidation services: 1) A loan taken out by the debtor to cover all of their outstanding debts. The debtor uses the loan to pay off all of their outstanding debts and then just has to deal with making the one loan payment. 2) A debt consolidation service provider which will negotiate with a debtor's creditors and obtain the most favorable terms possible. The debtor makes a monthly payment to the service provider who then makes payments to the debtor's creditors in an agreed upon apportionment. There are pros and cons to each type and the consumer is encouraged to use the links in this category in determining what is best for them.