Consolidation closes out several debts with a new loan, one bank, one due date. The concept is good. The mistake is looking only at the monthly and forgetting total cost.
The useful rule
Work out your current weighted-average CAT — what each peso of debt costs you on average today. If the consolidator's CAT is lower than that average and you don't stretch the term unreasonably, you win. If the consolidator's CAT is similar to your average and you only extend the term, all you're doing is financing the same debt more expensively over a longer horizon.
The typical case where it works
Three maxed cards at 60% CAT plus a SOFOM at 180%. Weighted average lands above 80%. A bank personal loan at 38% paying it all off, 36-month term, smaller monthly — that's a real save.
The case you shouldn't do
A card at 60% you'd pay off in 18 months. You replace it with a consolidator at 36% but over 60 months. The monthly drops, yes. The total goes up because you tripled the time. The relief is real; the saving isn't.
The side trap
The credit lines you free up (cards especially) sit there, available. Use them again while paying the consolidator and you end up with the original debt plus the consolidation. This happens to a worrying share of people who consolidate. Close at least one card when you consolidate — the one you use least — to dial down the temptation.