Debt Consolidation Solutions: Get Your Finances on Track

Debt Consolidation: Reduce Payments & Save Money

Have Credit Card Debt, Collection Accounts, Payday Loans, or Medical Bills? Get a personalized solution to manage your debt and achieve financial freedom.

Explore Your Debt Consolidation Options

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Here are Just a Few of the Major Credit Card Companies Money Fit Works With for Consolidating Debt:

The Money Fit debt management program isn’t a new loan substituting your existing debts. We’re your ally, actively negotiating with your credit card companies to alleviate your financial burden.

How to Save Money With Debt Consolidation

Debt consolidation combines all of your unsecured balances into one monthly payment. Depending on the program you choose, accounts are either paid in full with a new loan or paid down through a single, managed payment.

Money Fit offers consolidation without a loan. Our certified counselors work directly with your creditors to:

Negotiate lower interest rates and waive late fees
Reduce your required monthly payment
Roll every bill into one easy payment

Our Debt-Consolidation Programs May Help You:

Save an average of $238^* each month in interest and fees
Eliminate credit-card debt in 3–5 years
Stop collection calls and late-fee snowballs
Rebuild your credit with steady on-time payments

Enter your details to schedule a free call with a nonprofit counselor—or phone us directly for faster help. Keep reading below to learn exactly how consolidation works and whether it’s right for you.

^*Average savings for clients enrolled as of July 2024. Individual results vary.

The Different Types of Debt Consolidation

Instead of relying on a loan, that can carry various potential financial risks that we will describe later, this form of debt consolidation combines your unsecured debt into one monthly payment. Consumer Credit Counseling agencies have offered this nonprofit service for decades.

What Are Your Debt Consolidation Options? Let’s Review:

Debt consolidation can be a powerful tool to simplify your finances and potentially save money on interest. It combines multiple debts, like credit cards or medical bills, into one payment with (ideally) a lower interest rate. This streamlined approach can make managing your debt less overwhelming and potentially help you pay it off faster.

There are two main ways to consolidate debt:

Debt Management Plans (DMPs) with Non-Profit Credit Counseling Agencies:

- How it Works: You enroll in a program with a certified credit counselor who reviews your financial situation and creates a personalized budget. The nonprofit organization will contact your creditors on your behalf to lower your interest rates, late fees, and potentially even your total debt amount. You then make a single monthly payment to the credit counseling agency, which distributes the funds to your creditors according to the agreement. This is a good option for those who are disciplined with their finances but overwhelmed by multiple debt payments and high-interest rates.
- Pros: Potentially lower interest rates, reduced fees, streamlined payments, expert guidance from a credit counselor.
- Cons: It typically requires commitment for 3-5 years to complete the program. You will likely need to close your credit card accounts to avoid adding more debt while enrolled. While there may be fees associated with setting up the program, the fees are typically drastically lower than debt consolidation loan fees, or settlement fees.

Debt Consolidation Loans:

How it Works: You take out a new loan with (hopefully) a lower interest rate than your existing debts. You use the loan proceeds to pay off your existing creditors, leaving you with just one monthly payment to the lender.
Pros: Potentially lower interest rate, simplified payments, may be a faster way to pay off debt (depending on the loan terms).
Cons: You’ll need good credit to qualify for a favorable interest rate. There may be loan origination fees and other charges, which in some cases can be quite expensive. If you’re not disciplined, it’s tempting to use your old credit cards again and rack up even more debt.

Which debt consolidation option is the right for you?

Deciding whether a Debt Consolidation Plan with a nonprofit organization such as Money Fit or a debt consolidation loan is best for you depends on several factors:

Your Credit Score: Debt consolidation loans generally require good credit to qualify for a favorable interest rate. If your credit score is lower, a DMP may be more accessible, as credit counselors can negotiate with creditors on your behalf.
Your Debt Amount & Type: DMPs are designed to help with unsecured debts like credit cards and medical bills. If you have secured debts (like a mortgage or car loan), a debt consolidation loan may be a better fit (with careful consideration of the risks of using your home, etc., as collateral).
Your Financial Habits: If you’re disciplined with budgeting and committed to not using your credit cards while in debt consolidation, a DMP can be a great solution. If you’re tempted to rack up new debt, then a loan (where your accounts are closed) may ensure better success.
Your Goals: A DMP prioritizes long-term financial health, offering budgeting support and helping you rebuild credit. A loan can potentially offer faster debt payoff but requires careful management to avoid building new debt during repayment.

Get personalized guidance:

The best way to determine the right debt consolidation path for you is to speak with a certified credit counselor. They’ll be able to:

Analyze your financial situation in detail.
Explain the pros and cons of each option clearly.
Potentially suggest solutions other than debt consolidation, such as creating a repayment plan that works with your budget.

Remember: Debt consolidation tools can be powerful, but they work best when you’re informed. Taking an active role and seeking expert advice will put you on the path to financial freedom.

Frequently Asked Questions About Debt Consolidation

The following questions are the most common questions we are asked about regarding Debt Consolidation.

Will debt consolidation hurt my credit score?

Debt consolidation may cause a short-term dip in your credit score, especially if accounts are closed or a hard inquiry is made for a loan. However, as balances go down and payments are made on time, your score can recover and improve over time. Programs that reduce credit utilization tend to help in the long run.

How long does debt consolidation take?

Most debt consolidation programs take between 3 to 5 years to complete. Some people finish sooner depending on payment consistency, debt amounts, and available income.

Is debt consolidation safe?

Yes, debt consolidation is a safe and structured way to repay unsecured debt. Compared to debt settlement or bankruptcy, it’s often less damaging to your credit and more predictable. The key risk is accumulating new debt during the program.

How much does debt consolidation cost?

Costs vary. Programs like nonprofit debt consolidation typically charge an enrollment fee of $50–$100 and a monthly fee of $25–$50. If you consolidate through a loan, your cost depends on the loan amount, term length, and interest rate.

What are the disadvantages of debt consolidation?

Disadvantages include the closure of credit card accounts (which may affect your score), monthly program fees, or, with loans, high interest rates. Debt consolidation can backfire if you continue to use credit cards and increase your debt load.