Unlike your traditional loan, debt consolidation loans are used to pay off outstanding debts. All of your debt is added up to create the amount.
Instead of paying a number of different creditors each month, you take out one big loan and pay off all those accounts. Then you make a single payment on that loan once a month.
Although it is possible to use debt consolidation loans for debts that are already on your credit report, it is better to use this option before the debt goes to your credit, in order to save it.