Debt consolidation is a financial strategy that involves taking out a single loan to pay off multiple existing debts. The goal is to simplify the repayment process and potentially lower the interest rate, resulting in a lower overall monthly payment. Debt consolidation can be done through a variety of methods, such as personal loans, balance transfer credit cards, or home equity loans. It is important to note that debt consolidation does not reduce the total amount of debt owed, but rather combines it into one manageable payment.