Debt consolidation is acquiring a new loan and using the proceeds to pay off all the other debts. The new loan is usually secured against an asset, in most cases your home. The new loan is at a mortgage rate of interest which is much lower than credit card interest rates and for a longer term so your payment can be much lower. The risk is if you default on the new loan you can lose your home. Another risk is that if you don’t close the accounts that have been paid off you may be tempted to build up a debt balance again.