Debt consolidation means taking one new loan and using it to repay several existing debts, typically credit cards, buy now pay later balances, overdrafts and smaller loans. The result is one fixed repayment instead of a juggle of due dates, and a term with an actual end.
It works when the new loan’s total cost beats what the old debts would have cost to clear, or when the juggle itself was causing missed payments and fees. It backfires in two known ways: stretching short debts over a long term, which can cost more in total even at a lower rate, and leaving the cleared cards open, which is how people end up holding the loan and brand-new card debt a year later.
The honest comparison is total amount payable of the new loan versus the realistic cost of staying put, with the establishment fee included. For consolidation loans arranged through BorrowClub, the lender can settle your old balances directly, and the offer shows that comparison before you sign.
The full arithmetic, both traps included, is in when consolidation works and when it costs more.