A debt consolidation is one big loan that pays off your other loans.

Just remember that when you consolidate a loan, you now owe that money to the lender or bank. You will also get a lower interest rate.

Debt Management will also reduce your debt, but it works a little different than a consolidation loan. This is where you negotiate with a debt management agency or credit counselling agency. They generally act as the middleman. They will negotiate with your creditors on your behalf.

You then pay them the agreed amount, and they will then pay your creditors. In the end it comes down to you and what your financial needs are.

Remember debt consolidation is not for everyone. Make sure of everything before applying for a loan – secured or unsecured.