Debt consolidation means the conversion of multiple debts into one debt before one lender. If you encounter or face multiple debts of different lenders, then consolidation of all the debts pays all the different creditors but then you have to pay the one who pays different creditors. Therefore it does not eliminate the debt, instead now you become payable to only one lender.
It is just similar, suppose you owe money to different people, and everyone has its own terms, own moods and you are unable to face each one of them in the situation, therefore you find one rich man and ask him to pay all the others. Now you are answerable only to him.
Similar to the above assumption; debt consolidation Company settles the debts with all the creditors looking at its benefit. Thus is tries to minimize the interest rates, or eliminates them and also tries to minimize the actual debt as well. This way the loan program which it presents before the consumer is far more easy and flexible. The loan return time period is stretched over to years and the interest rate is also considerably low. The loan can only be eliminated if you file a bankruptcy against the consolidation firm in the long run, or you settle the debt. It does provides a relief in the sense that the terms become more easy and you have to interact with only one company, the consistent headache of different creditors is removed. Consolidation will not eliminate the debt altogether, but it does reduces it considerably.