1. Debt Consolidation Loan

What it is:

A debt consolidation loan is a new personal loan you take out to pay off multiple debts (like credit cards) at once. Ideally, it has a lower interest rate than your existing debts, helping you save money and simplify into one monthly payment.

Best for Consumers With:

✅ Good-to-excellent credit (usually 670+).

✅ Stable income that is 3x their current unsecured debt amount to meet traditional lender DTI requirements

✅ Consumers who are current on their payments and want to help their credit utilization and convert compounding interest to simple fixed.

Positives:

- Helps Credit Utilization by paying off cards

- Converts compounding interest to fixed interest

- Payments can be lower then minimums

- Cards Remain Open

- Pay off overall debt faster

Things to Consider:

-Monthly payments may be higher then current minimum payments.

-To qualify for a low rate loan verifiable income must be 3x the debt amount regardless of credit score.

-Can be more difficult to qualify with traditional lenders that offer lower rates when self-employed (1099).

-Can put you in more debt if you have to use the credit cards again before paying the loan off.

2. Nonprofit Debt Management Plans

What it is:

A nonprofit debt management agency helps you organize your unsecured debts (such as credit cards) into one low monthly affordable payment plan. They negotiate with creditors to lower your interest rates and set up a structured monthly payment plan without a new loan or having to miss payments. Average rates are as low as 7% for consumers in the program and they can pay off their eligible debts in as little as 24 months.

Best for Consumers:

✅ With $5,000–$20,000+ in credit card debt but can be more.

✅ With steady income who can afford a fixed monthly payment, but need relief from high interest rates.

✅ Who might not qualify for a low rate loan but still want to save money on interest.

Positives:
- Reduce interest rates dramatically

- Consolidate Payments

- Pay off debt in 3–5 years while avoiding bankruptcy

- Lower monthly payments than minimums or a loan

Things to consider:

- Cards in program are closed to reduce interest

- There are lower payments with the debt reduction program if affordability is most important.

- Some lenders and account types are not eligible such as collections or student loans.

3. Debt Reduction

What it is:

The debt reduction program is a regulated program to help consumers experiencing financial hardship afford to pay their debt and avoid bankruptcy by reducing the owed balances and shutting off the interest. This program will be the lowest payment and most savings of any option for consumers looking for the most affordable payment and fastest way to pay out of the debt.

Best for Consumers:

✅With larger debt amounts ($10k is the minimum requirement in most states to qualify)

✅ Experiencing financial hardship (such as job loss, medical bills, divorce).

✅ Who have either fallen behind on payments, about to, or financially struggling with their minimums.

✅Consumers who cannot realistically pay their full balances within 2-4 years on their own.

Positives:
- Reduce total debt balances (usually 40%-60%)

- Shuts off interest rates (no more throwing money away)

- Most savings of any option (monthly, interest, time)

- Fastest way to pay off debt and start fresh

- Avoids major impact bankruptcy

- No stamp or public record of the program

Things to consider:

- Must stop making payments initially for accounts balances to get reduced and interest to be turned off.

- Phone calls initially but go away once accounts are settled and getting paid.

- If current going into the program - credit will go backwards initially but the point is that if you're going in circles currently with minimums then it's like taking 1 step back to go 2 steps forward instead of going in circles and throwing money away.

4. Bankruptcy (Chapter 7 or Chapter 13)

What it is:

Bankruptcy is a legal process that can either eliminate (Chapter 7) or restructure (Chapter 13) most of your debts. It is a formal court procedure, and protections go into effect immediately to stop collections and lawsuits.

Best for:

✅ People who cannot realistically pay their debts back, even with settlement or counseling.

✅People facing lawsuits, wage garnishment, or overwhelming financial hardship.

✅ People with very high debt compared to income and few realistic options left.

Common Goals:
-Legally eliminate or restructure debts

-Stop collection actions

-Get a fresh start financially (with long-term credit rebuilding afterward)

5. Self-Resolution ("DIY Payoff")

What it is: In some cases, based on income, debt amount, and payment ability, it may be better for a consumer to manage their debt payoff directly. This means budgeting carefully, negotiating lower interest rates themselves, or using a strategic payoff method (like avalanche or snowball).

Best for:

✅ People with lower debt balances (typically under $5,000).

✅ People who have the ability to make aggressive monthly payments.

✅ People who prefer to avoid programs, loans, or legal options.

Common Goals:
-Save money on fees

-Build personal financial discipline

-Pay off debts independently without third-party involvement