In order to need debt consolidation, one must have loans, credit card debts, or any other debts that are possibly overdue, or have no way to pay them. Debt consolidation is someone called a debt consolidator does in fact take all the loans, puts them in one, pays it off, so there is just one loan that the person has to pay for. With debt consolidation, a lower interest rate is usually changed from what you were paying before. It's said that 78% of people that take out a debt consolidation loan, usually end up going back into debt, because they do get so excited about paying it off, that sometimes they will just go on a shopping spree. It is hard to have a budget and when you know that you can get out of any loans, nothing really stops you from keep doing it, which is a problem with debt consolidation.