Debt consolidation is a process in which all the multiple debts of a client are cumulated into one single huge loan. This process in of mainly two types the first one involves a credit consolidation company which studies all your previous loans and comes with a plan. The company negotiates with all your credit companies and makes a agreement in which you need not have to pay all different monthly installments which have different dates. Instead you can just pay one single amount which lower installments and longer tenure. This is will let you breathe a sigh of relief and this will also help in increasing your credit rating. 

The other method is to apply for a consolidation loan. A consolidation loan is a loan sanctioned by the debt consolidation company. They sanction these loans irrespective of your credit status. Amount sanctioned by the company will an equivalent amount of all the smaller loans. And through this you can clear off all your pervious loans. The interest rate on this loan is much lower and tenure is longer. By this you need not have to pay multiple loans instead you can just pay a single loan. But the thing to be noted is that this loan only lets you have some more time but in the end you need to eliminate debt of this consolidation loan some how in the prescribed time. Or else you would bankrupt or can be legally fined. And this is the reason why people prefer debt elimination over debt consolidation.