A debt consolidation option, such as a debt consolidation loan, is a way to consolidate debts. A bank will grant one larger loan to pay off all the other loans. Consolidation loans have a lower interest rate, but they are generally available for a longer time. It can help you avoid a debt trap and create a manageable payment plan. On the other hand, a late payment on your consolidated debts may still negatively affect your credit score. It’s crucial to explore various debt consolidation alternatives to find the best fit for your financial situation.