Simply put, debt consolidation is an amount of loans into other loans; but more often than not, involving a secured loan against an asset that will serve as collateral, like a house. For example, a mortgage is secured against the house. The loan’s collateralization will allow a lower interest rate because by collateralizing, the asset owner agrees to allow the foreclosure of the asset to pay back the loan. With this, the risk to the lender is reduced; therefore, the interest rate is lower. Debt consolidators are the companies that offer this service.