Credit card balances and personal loans can feel overwhelming. Here's how the most common options work, what they can cost, and what to check before you sign up with anyone, so you can choose what fits your situation.
There is no single right answer. The best choice depends on how much you owe, your income and how quickly you want to be done. Here is a short, balanced overview of each.
Build a budget, then pay extra on one balance at a time. The "snowball" method starts with the smallest balance; the "avalanche" method starts with the highest interest rate.
Costs nothing, but it takes discipline and works best when you can pay more than the minimum.
A counselor reviews your budget and may set up a debt management plan, where you make one monthly payment and creditors may lower your interest rate.
Look for a nonprofit agency. Plans usually take 3 to 5 years and may close your credit card accounts.
You take one new loan to pay off several balances, leaving a single payment, ideally at a lower interest rate.
Only helps if the new rate and fees are lower than what you pay now. Approval depends on your credit.
A company negotiates with your creditors to accept less than the full balance. It is usually for people with large unsecured debts who are struggling to keep up.
Can hurt your credit score, forgiven amounts may be taxable, and not all creditors agree to settle.
Whichever option you choose, these simple checks help you avoid surprises.
If you have unsecured debt such as credit cards or personal loans, you can answer a quick question and then speak by phone with an independent debt relief provider about the options that may be available to you.
We are a marketing and referral service. We publish general information about managing debt and connect callers with independent third-party debt relief providers. We are not a lender, debt settlement company, credit counselor, law firm or government agency.
No. Calling costs you nothing and you are under no obligation. If you choose to enroll in a program, the provider will explain its fees in writing first. We may be paid by providers when you call them.
No. We are not affiliated with or endorsed by any government agency or program.
Calling and asking questions does not affect your credit. Some debt relief options, especially debt settlement, can lower your credit score. Ask the provider how the specific program would affect you.
No. Eligibility depends on the type and amount of your debt, your state and the provider's requirements. Programs are not available in all states.
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