To the person drowning in debt, a debt-consolidation loan looks a lot like a lifesaver. But agreeing to such a loan without understanding it completely could be a serious mistake.

Here's the way it's supposed to work: You pay off all your small, high-interest consumer debts with the proceeds of a new, low-interest loan that has a lower payment than the total of the smaller payments. In theory, consolidation is a terrific solution for a burdensome debt situation. In reality, it can force you into even more treacherous waters. Basically, there are three ways to consolidate:

* A new, low-interest signature (unsecured) loan from an individual, bank or credit union. If you can get it, this type of debt consolidation is ideal.

* Transferring all of the balances to a new credit card. Beware of excessive transfer fees or other troublesome conditions buried in the fine print.

* A home-equity loan. It sounds great to pay off your high-interest debts with money borrowed against your home's equity. But this only increases the stakes. Now if you fall behind, the lender takes your home through foreclosure.

There is one more significant danger that all of these types of consolidation loans have in common. I call it the "doubling effect." If you've ever lost 10 pounds and gained back 20, you'll understand right away. Most people who pay off all their pesky credit card balances look at those zero balances with a sense of personal accomplishment. They've done something remarkable. They didn't really repay their debts, but they enjoy pretending. They say they won't use those accounts again, but they fail to close them.

Statistics indicate that the person who consolidates to a new loan will enjoy the zero balances for a short time, but will eventually charge them back to all-time highs. The average time is two years. That means double the trouble because of the debt-consolidation loan. Before proceeding with any type of debt-consolidation loan, make sure you get honest answers to these hard questions:

* Is the total consideration -- not just the monthly payment -- of the debt-consolidation loan (principal and interest) less than the consideration combined for all the debts it will pay off?

* Are the terms reasonable? If, for example, the new loan or credit card carries significant penalties (you lose the attractive interest rate if you are late with one or two payments), that is not reasonable. If you must pay a big loan origination fee, that is not reasonable.

* Am I mature enough to cancel the accounts that will be paid off in the consolidation process?

Except in extreme cases, the best way to face a load of unsecured consumer debt is to stop adding to it, develop your Rapid Debt-Repayment Plan (you can see a demonstration of how this works at http://www.cheapskatemont hly.com), then buckle down and get to work!