Debt consolidation loans allow consumers to transfer the account balances from multiple credit cards or installment loans into a single loan and to make a single monthly payment. For debt consolidation loans to be beneficial, the repayment period for paying off the consolidation loan should be shorter than what it would be for your existing debts without the loan. Secondly, the interest that you pay over the repayment period should be less than what you would pay with your existing repayment terms. In some cases, a debt consolidation loan may look attractive because it has a significantly lower monthly payment than what you are paying today, but it is likely the case that the lower payment is due to extending the repayment of the loan over a much longer repayment period.