A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.

Money 911: Your Most Pressing Money Questions Answered, Your Money Emergencies Solved (ed. Harper Collins, 2009) - ISBN: 9780061962097