Consolidating home and car loans
In the United States, federal student loans are consolidated somewhat differently from in the UK, as federal student loans are guaranteed by the U. Upon consolidation, a fixed interest rate is set based on the then-current interest rate. If the student combines loans of different types and rates into one new consolidation loan, a weighted average calculation will establish the appropriate rate based on the then-current interest rates of the different loans being consolidated together.
The bulk of the consumer debt, especially that with a high interest, is repaid by a new loan.
However, such consolidation loans have costs: fees, interest, and "points" where one point equals to one percent of the amount borrowed.