Debt consolidation is the process in which you take out one big loan in order to pay off all your other smaller loans. This can be very helpful if you are paying several different loans off. This is because by consolidating everything into one loan, you’re not going to have to make multiple monthly payments. With debt consolidation you’ll only get one monthly statement, and pay one monthly payment. In some cases your minimum monthly payment will actually decrease because your payments are being stretched out over a longer period of time.