If you have many financial debts, like credit card debts, a debt consolidation loan can help you to fix them. Credit cards and the like charge very high interest rates and some even have a monthly charge. They cannot help doing so as they are unsecured debt. If you take a loan on real estate, the interest is much lower and it is relatively stable. Furthermore, it is for a long period of around a decade. Thus the amount you pay back on the debt consolidation loan is quite small and manageable.
This results in just one payment a month, which takes the place of that of the credit card debt re-payment. It also consumes less effort since you will pay just once a month. This ensures that no payment gets forgotten or left out. In the case of a credit card, you are fined heavily for making a late payment and to make matters worse the interest rate is raised. A record of all payments beyond the deadline is also sent to the credit card companies, which in turn might raise their rates.
Just as everything else has drawbacks, so do debt consolidation loans. You normally keep your residence or other immovable property as a collateral when availing of such a loan. So if circumstances are such that you cannot pay back the loan, you stand a chance of losing the security deposit. Also, a debt consolidation loan will not be of much use of you continue being a spendthrift and be lavish on your credit card. The loan puts money back into the hands of the customers instead of making the credit card companies richer.