A debt consolidation loan company is only interested in one thing: maximizing their return. They do this by stretching out 4 or 5 years worth of debt to 10-20 years (or more). They show a smaller interest rate but a much longer term. They really don’t care if you close all your other credit accounts or if you run them right back up to the maximum credit limit.

Yes, it would be easier to administer just one loan, but that almost never happens. One loan soon becomes two, then three, four, five…

From the psychological side, I think there’s a lot to be said for seeing small successes along the way, even if there is more to keep up with. When a person can write “PAID OFF” on their $75 doctor’s bill after one month, then write “PAID OFF” on their $292 car repair bill two months later, then write “PAID OFF” on their $475 furniture store bill, well, you get the idea. They get juiced! I know I did. There isn’t much to compare with seeing progress from the starting gate.

I do understand what you’re saying and I do see your point. There are times that consolidation would be a good idea, but in my opinion, those times are few and far between.