Debt consolidation is a refinanced loan with extended repayment terms. consolidation loan. A new loan that pays off two or more existing loans or indebtednesses, usually resulting in lower payments.Home equity lines of credit are often marketed as consolidation loans, urging consumers to pay off high-interest-rate credit cards and automotive debt for lower-interest-rate, tax-deductible, mortgage debt.While the practice does reduce … Your credit history. Debt consolidation loans can come with an origination fee, an upfront charge for taking out the loan that generally ranges from 1% to 8%. consolidation loan synonyms, consolidation loan pronunciation, consolidation loan translation, English dictionary definition of consolidation loan. Define consolidation loan. consolidation loan. The Servicer shall also cause the related Schedule of Trust Student Loans to be revised to reflect the addition of any Add-On Consolidation Loans to the Trust Estate. Compare our picks for the best debt consolidation loans. You can qualify for a consolidation loan: You'll generally need good credit as well as proof of income.If you can't qualify based on your own financial profile, you may need a co-signer. Debt consolidation is the process through which a borrower refinances and combines several loans into a single one to receive the benefit of a lower interest rate or a reduced periodic payment or maybe both, this leads to a reduction in his liability and brings in an ease in the management of the loans. A lower interest rate isn’t always a guarantee when you consolidate. Extended repayment terms mean you’ll be in debt longer. Debt consolidation is different from debt settlement. If you take out multiple loans, consolidation can make repayment a lot easier. When you have a collection of loans taken out, from a variety of different lenders or credit providers, it can sometime be best to consolidate your loans. A new loan that pays off two or more existing loans or indebtednesses, usually resulting in lower payments.Home equity lines of credit are often marketed as consolidation loans, urging consumers to pay off high-interest-rate credit cards and automotive debt for lower-interest-rate, tax-deductible, mortgage debt.While the practice does reduce … Debt consolidation loans help borrowers combine multiple high-interest debts into a single payment. The Ombudsman helps borrowers having problems with Direct Loans, Subsidized and Unsubsidized Stafford Loans, PLUS Loans (for parents) and Consolidation Loans. You're able to reduce the interest rate on your current loans by consolidating: It generally makes little sense to take a consolidation loan at a higher rate than your current debt, as you'd … Some debt consolidation loan companies allow debt-to-income ratios as high as 50%, meaning your monthly debt obligations should add up to no more than half of your gross monthly income. You might also be charged a prepayment penalty if your old debt has one. Debt consolidation doesn’t mean debt elimination. Debt consolidation loan rates are typically higher than rates on home equity loans, and if your credit isn’t very good, a debt consolidation loan could cost as much or … Simply put, consolidating your loans means that you combine multiple loans into one, making for one easy monthly payment instead of separate ones. Debt consolidation loans generally have terms between one and 10 years, and many will let you consolidate up to $50,000. Most lenders look for a credit history free of bankruptcies, tax liens, repossessions or foreclosures.