Best Debt Consolidation Loans in Canada for 2023 | (2023)

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Written by Sarah Pritzker

Last updated on April 18, 2023 Comments: 4

As per the fourth-quarter reports, the average Canadian owes almost double on every dollar they make. The actual number teeters somewhere in the range of $1.79 of debt for every dollar of disposable income. Staring down the barrel of such sobering statistics, it’s not surprising that so many people are looking for debt relief. For Canadians looking to climb their way out of debt, one of the best tools has been consolidation loans.

Debt consolidation can help you save on interest payments, keep monthly payments more organized and manageable, as well as lower your monthly payments to a more feasible sum.

If you’re struggling under the burden of serious credit card balances, student loans, medical bills, or other types of debt and are looking for a solution, this is the guide for you.

In This Article:

What Is a Debt Consolidation Loan?

A debt consolidation loan is cash you can access that is used to pay off all your debt from previous loans, overdue bills, credit card balances, and any other outstanding payments due. Debt consolidation loans in Canada are available for both private and business use, and they are a promising way for both use cases to settle an unstable financial situation.

Best Debt Consolidation Loans Available in 2023

If you’re ready to start depleting your debt, it’s time to start comparing providers. Here are a few of the best debt consolidation options available to consumers in 2021:

Interest RatesLoan AmountsLoan Terms
Loans Canada1.99%–46.96%$500 to $50,0003 to 60 monthsRead More
LoanConnect6.99%-46.96%$500 to $50,0003 to 120 monthsRead More
Alpine Credits5.75%+$10K+See Alpine CreditsRead More
Lendful9.9%+$5,000–$35,0003 years or 5 yearsRead More

Loans Canada

Best Debt Consolidation Loans in Canada for 2023 | (2)

Apply Now


Credit Score:No minimum

Loan Amount:$500 to $50,000

Loan Term:3 to 60 months

(Video) DEBT FREE IN 2023: Debt consolidation Loans

Loans Canada is a lending portal for people looking to borrow cash. What appeals to Canadians about this marketplace are its flexible approval ratings and turnaround time. Loans Canada partners can get you your money in as little as 48 hours. And there is a lender for just about any credit score out there.

How it works:

Applying for a loan with Loans Canada is intuitive and quick. In fact, it probably won’t take you more than five minutes. Here’s how:

  1. Fill out your basic information (name, phone number, age, employment info)
  2. Submit documentation (pay stubs, proof of citizenship, etc.)
  3. Wait for approval. This is usually given within 48 hours
  4. After approval, finalize the loan, and receive your money

What we liked best:

– Fast money:While many online lending marketplaces offer you access to multiple lenders simultaneously, Loans Canada can usually get you your money within 48 hours. That’s exceptionally fast.

– Liberal Approval Rating:Loans Canada works with all types of credit scores and histories. Even if you don’t have sterling credit, you can probably find a lender who is willing to approve you for a loan within this network.

Click to applyor learn more by reading our completeLoans Canada review.


Best Debt Consolidation Loans in Canada for 2023 | (3)

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Powerful lender search engine for easy rate comparison

Rates: 6.99%-46.96%

Credit Score:no minimum

Loan Amount: $500 to $50,000

Loan Term: 3 to 120 months

LoanConnect provides simple and easy ways to find debt relief in Canada. A Canadian lenders marketplace, LoanConnect acts as a powerful search engine for finding the best loans and rates possible. Basically, this service has created a wide lender network with more than 20 of Canada’s well-known lenders to make application and loan comparisons faster and less complex.

Here’s how it works:

  1. Enter your information into the application form.
  2. LoanConnect will run your data through the network of lenders to find a suitable match.
  3. Get loan offers to review, compare, and approve.
  4. Choose the loan that’s best for you and connect directly to the lender to finalize the process.

What we liked best:

While there are a lot of lending portals out there, there were a few things that made LoanConnect stand out, including:

– Huge network of reliable lenders to choose from:The bigger the pool of lenders, the more competitive the rates you’ll receive.

– Fast turnaround:Most lenders will offer pre-approval, so you can have your money in as little as twelve hours.

– Flexible repayment terms:LoanConnect lenders vary in their repayment terms. You can find loans for anywhere typically between3 to 120 months.

Click to applyor learn more by reading our complete LoanConnect review.

Alpine Credits

Best Debt Consolidation Loans in Canada for 2023 | (4)

(Video) Top 10 Debt Consolidation Loans for Bad or Fair Credit 2023 (Large Amounts @ Low APR)🔶CREDIT S3•E159

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Rates: Starts at 5.75% for first mortgage and 8.75% for second mortgage (rate depends on property value, property location, etc.)

Credit Score: Credit scores have no impact on your loan approval or interest rate

Loan Amount: $10,000+

Loan Term: See Alpine Credits

Alpine Credits is a bit different than a typical lender, in that it offers only secured loans and lends exclusively to homeowners. Securing a loan with your real estate can potentially nab a lower interest rate than you might get with a regular, unsecured loan, and it can also open up borrowing possibilities to those with poor credit. That said, you do carry the risk of losing your secured asset if you default on your loan.

How it works:

  1. Fill out basic info about who you are, your annual income, housing costs, etc.
  2. Confirm info you entered above and enter additional details about the value of your real estate
  3. Alpine Credits will email you instructions about which documents to send them in support of your application (most recent property tax assessment, recent mortgage statement, etc.)
  4. Receive your loan offer and decide if the terms offered meet your debt consolidation needs

What we liked best:

– Low interest rates:The whole point of a consolidation loan is to get an interest rate lower than the interest rates that your current debts are subjected to. Securing your home against a loan will make getting a low interest rate far more realistic than it might be with an unsecured loan, particularly if you have a poor credit score.

– Open-minded approvals: Alpine Credits claims to have a broader perspective than traditional banks when evaluating loan applicants, prioritizing the amount of equity you have in your real estate over your credit score or income level.

Click here to apply for a secured loan with Alpine Credits.


Best Debt Consolidation Loans in Canada for 2023 | (5)

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Rates: Starting at 9.9%

Credit Score: Minimum 600 (at least 650 in Alberta and Quebec)

Loan Amount: $5,000–$35,000

Loan Term: 3 years or 5 years

Lendful is an online loan marketplace whose aim is to ‘help Canadians that pay over 20%+ on a credit card control their financial future.’ To that purpose, Lendful offers competitive, unsecured debt consolidation loans to those that can meet some basic requirements: You need to have at least an average credit score and a credit history three years or longer, as well as some form of a steady income in order to qualify. Loans are available to those 19 years of age or more who are permanent residents of Canada.

How it works:

  1. Enter some information into a preliminary application covering where you live, your income, basic living expenses, etc.
  2. Review a more detailed application sent via email by Lendful, fill it out, and sign electronically. This stage of the app prompts you to enter additional info about your debt ratio, as well as the financial details for any co-applicants you’d like on the loan (which could increase your chances of being approved and/or being offered a low interest rate).
  3. Lendful sends you the terms of their loan offer; you decide whether or not to accept. If approved you receive your funds within 24 hours.

What we liked best:

– Good interest rates for unsecured loans: Applicants with strong credit scores can get a loan at an interest rate that is conducive to consolidating debt. You can do better than a 9.9% interest rate if you have a secured asset to back up a loan (like a house or a car), but for an unsecured loan this is a strong rate useful for consolidating high-interest debt, like credit card debt.

– Wide range of loan amounts available: Debt consolidation is a sound financial strategy for those with high-interest debts of all levels, big or small. Even if your credit card debt is ‘only’ $5K, getting a consolidation loan with Lendful can still substantially cut down on what you’ll pay in interest.

Click here to apply for a loan with Lendful.

How Can I Choose the Right Loan and Lender?

With so many different types of debt consolidation options, it can be hard to figure out which one is best for your situation. Generally speaking, the terms of the loan will be a good gauge of whether or not it’s the right type of loan for you. Look at the following features to compare your options and make your selection:

(Video) Debt Consolidation: The [CORRECT WAY] To Do It | Debt Consolidation Credit Cards

  • APR:The annual percentage rate is how much interest you will pay throughout the year for your loan. The higher the APR, the more you are paying in interest.
  • Loan amount:Some lenders are willing to lend large amounts, while others will cap your borrowing. Find a lender that works with your debt needs.
  • Fees:Be careful to learn about all the fees involved and compare these alongside the APR. A low-interest rate will be cancelled out by a high origination fee, prepayment penalty, or other surcharges found in the fine print.

Should I Apply for a Debt Consolidation Loan?

While consolidation loans may seem like a great idea, it’s not the best solution for everyone. The question is: how will you know if a debt consolidation loan is the right option for you? Well, that depends on the type of debt you have and your motivation for taking out the loan.

Generally, these loans come with low eligibility requirements considering the circumstances, making it relatively easy to get approved. If you have multiple types of debt and are willing to pay off the loan responsibly, consolidation is the best option to manage everything at once.

How Can I Receive a Debt Consolidation Loan?

Unlike many other types of financial commitments, applying for a debt consolidation loan is very simple:

  1. Compare lenders. Consider how strict their policies are for missing a payment, how disciplined you will need to be in repayment and curbing your spending habits, interest rates and accessibility to company representatives
  2. Apply for a loan online from the lender that works best for your needs
  3. Wait for the lender to approve your request for a loan
  4. Receive your money and use it to pay off your existing debts
  5. Set up a method of making monthly payments toward your new debt consolidation loan
  6. Become debt-free!

It’s really that simple. Consolidation loans are beneficial for debtors because they provide you with better interest rates, a set monthly payment amount regardless of balance, and the mere fact that you are not accruing more debt.

Different Types of Debt Consolidation Solutions

Debt relief is not a one-size-fits-all solution. In fact, there are many different options that you can, and should look into when facing debt. Some of the most common ones include:

Debt Consolidation Loan

Many Canadians often find debt consolidation to best meet their debt repayment needs. These types of loans typically have a lower interest rate than most other types of loans, making it easier to stick to the monthly payments and get out of debt. This may mean extending your repayment term by several months or even years, but if it means you can stick to the repayment plan, it is worth the additional interest payments to get out of debt.

Home Equity

A home equity loan is a good option for homeowners. Equity is how much your home is worth on the market minus whatever mortgage payments are still due. So, if your home is valued at $200,000 on the market and you have $50,000 left on your mortgage, then your home equity would be $150,000.

To get approved for a home equity loan, you’ll need to have at least decent credit (score above 620). Additionally, your home equity will have to be sizeable enough to make it worthwhile for the lender to approve you for the loan. If you do get approved, though, this is a good way to consolidate debt, because home equity loans typically come with much lower interest rates than other types of loans. The one downside to this process is that your home is now acting as your collateral, and if you fail to pay the loan back, it can be foreclosed upon. For this reason, many people prefer to steer clear of home equity loans as a debt consolidation option.

Line of Credit

A line of credit works a lot like a low balance credit card. The lender lets you borrow a certain amount of money, repay it, and then borrow that same amount again. As long as you repay the balance, you can keep borrowing that same amount for the entire term of the line. A line of credit is a bad idea, though, if you are not changing your spending habits. After all, with an endless source of borrowing potential, it is tempting to continue racking up a bill on your credit cards without ever really taking care of the debt or the problem. Use this solution if you are confident that you can stymie your spending habits.

Credit Card Balance Transfer

This is not always one of the top-recommended options for debt consolidation. What it is, when it’s a good idea, and when it should be avoided will be discussed in the section below.

Friends and Family Loans

This is another option that people can look into when trying to consolidate debt. If you have a friend or family member willing to loan you the money, you can probably get more generous repayment terms and possibly even waive the interest altogether. Just be careful with this kind of loan because it can turn a friendly gathering or family holiday party into a hotbed of politics and uncomfortable feelings.

Balance Transfer Credit Card vs Debt Consolidation Loan

One other option we didn’t discuss above is a balance transfer credit card. Here’s a quick look:

Debt Consolidation LoanBalance Transfer Credit Card
APR2.99% - 46.99%0% introductory, post promotional interest rate 14.74%-29.99%
Payment flexibility Long and short repayment terms, option to miss payments periodically without penaltyNo flexibility, must pay each month without fail
Fees Origination, late payment, early payment penalty: range from 1% to 5%Annual, balance transfer: range from 0% to 3%
Payoff time2-7 yearsPost-promotional 30-day repayment schedule

Debt consolidation loans are better if you have multiple types of debt, like student debt, various credit cards, and outstanding bills.

Balance transfer credit cards, on the other hand, are a better option if you currently have a lot of credit card debt sitting on a high APR card. It’s easy enough to fix; just switch over to a 0% APR introductory rate with a low or no balance transfer fee, but be sure to pay off the transferred balance within the promotional period as afterwards the interest rates become quite high.

A Case Study: Jack Nimbly Resolves His Debt

All this talk about theoretical interest rates and savings can be extremely confusing for the average consumer. Here is a real-life example of how you can save by consolidating debt:

Jack has racked up $8,000 in credit card debt, making monthly payments of $450 at a 20% interest rate. This will take him 22 months to pay back and accumulate $1,567.30 in interest. In addition, his car loan debt amounts to $2,500 and he is paying $150 a month at a 12% interest rate. At this rate, it will take Jack 19 months to pay off the debt with an added $248.64 in interest.

This brings Jack to a headache of monthly payments in the amount of $600 over the span of about 2 years, all the while paying $1,815.94 in interest. That’s a huge loss and a lot to track for Jack.

Alternatively, Jack can take out a debt consolidation loan. He can continue his payments of $600 a month and lower his interest rate to 8%. This way, Jack will pay off his debt in just 19 months, with a significant reduction in his total interest to $702.35, cutting what he was originally paying by more than half!

Summing It Up

Debt consolidation loans are not for everyone. If you have no plans on changing your spending habits, can’t make the monthly payments, or have filed for bankruptcy, debt consolidation is not a good option for you to consider.

However, if you are ready to get out of debt, want to make a fresh start of it and have the ability and means to make monthly payments, this is an excellent solution. A single consolidated monthly payment will be easier to manage, both mentally and financially. Plus, the lower interest rate will add up to lower monthly payments and less interest paid out overall. Whatever you choose though, always do your research and compare prices to be sure to avoid scams or offers that seem too good to be true. With a little patience and discipline, you can leave behind your debt and gain control of your finances.

(Video) The TRUTH About Credit Card DEBT Consolidation In 2023! 🤫


? ? Do debt consolidation loans hurt your credit score?

One downside to debt consolidation is that it may harm your credit score. In fact, it can if you continue running up a credit card balance, miss multiple monthly payments on your loan, or if you are declined for a loan. However, in many ways, debt consolidation can actually improve your credit score if you make your monthly payments on time, reduce your debt, responsibly handle a personal loan (diversifying your credit), and you’ve changed your spending habits. So, the answer depends on you.

? ? Are debt consolidation loans safe?

Like any financial commitment, a debt consolidation loan is safe as long as you are willing to be responsible. Collateral-based loans are more dangerous because if you miss multiple payments, you risk losing the item you put up for collateral (frequently, a home). But if you take out an unsecured loan and make your monthly payments in a timely fashion, debt consolidation is perfectly safe and a good idea.

? ? Can I get debt consolidation with bad credit?

There are many lenders in Canada that will work with people who have bad or no credit. Whether you are young and haven't had the time to build your credit, or have gone through an unexpected financial downslide, there are Canadian lenders out there that are still willing to help you out. Keep in mind that a bad credit score, however, might make your interest rates very high, which could nullify the point of getting a debt consolidation loan in the first place.

Related Articles:

  • Best Personal Loans for Bad Credit
  • Best Balance Transfer Credit Cards
  • Best Credit Cards for Bad Credit
  • Should I Use a Loan to Pay Off My Credit Card Debt?
< Previous American Express Card Levels Guide Next > Tangerine Bank Review
(Video) Top 10 Debt Consolidation Loans for Bad Credit 2023: Lenders That Save, You Big Time🔶CREDIT S3•E788


Best Debt Consolidation Loans in Canada for 2023 | ›

Getting a debt consolidation loan for people with bad credit is hard, but not impossible. For example, you can ask someone to co-sign for you with an unsecured loan or secure your loan with home equity if you own your residence.

Is it hard to get a consolidation loan in Canada? ›

Getting a debt consolidation loan for people with bad credit is hard, but not impossible. For example, you can ask someone to co-sign for you with an unsecured loan or secure your loan with home equity if you own your residence.

How can I consolidate my debt in Canada? ›

  1. Consolidate using a Debt Consolidation Loan. ...
  2. Consolidate using a Home Equity Loan / Refinance Mortgage / Second Mortgage. ...
  3. Consolidate using a Line of Credit or Overdraft. ...
  4. Consolidate by using your Credit Cards. ...
  5. Consolidate using a Debt Management Program. ...
  6. Consolidate by doing a Debt Settlement. ...
  7. File a Consumer Proposal.

Why won't I get approved for a debt consolidation loan? ›

If you can't get a debt consolidation loan, it's most likely because you don't make enough money to keep up with the payments of the loan or you don't meet the lender's credit score requirement. It's also possible that you don't satisfy basic requirements such as being at least 18 years old and having a bank account.

Is it hard to get approved for debt consolidation? ›

Debt consolidation loans for bad credit are hard to come by. Lenders like to see a credit score of at least 670 for a debt consolidation loan, but probably closer to 700 just to be safe.

Is Canada debt Free Program legit? ›

The only Canadian government debt relief program is a consumer proposal. A consumer proposal is a formal, legal debt settlement program available under the Bankruptcy and Insolvency Act. It is a safe, reliable debt relief program that allows you to avoid bankruptcy.

Where can I borrow money in Canada? ›

Personal loans are available from traditional lenders, such as banks and credit unions, as well as alternative lenders such as payday lenders, title loan companies, private lenders and pawn shops. Your lender may offer you a loan for more than what you need. Be careful not to borrow more than you can pay back.

How can I clear my debt in Canada? ›

Decide on a strategy
  1. Choose a timeframe. ...
  2. Decide which debts to pay off first. ...
  3. Debts with high interest rates. ...
  4. Debts with the lowest balance. ...
  5. Make a plan to pay back your family or friends. ...
  6. Work directly with your creditors and your financial institution. ...
  7. Close accounts on debts you've paid off. ...
  8. Consider a secured credit card.
Jan 13, 2023

How to get out of 100k debt? ›

Here are 11 strategies from Harzog, Pizel, Nitzsche and other experts on how to attack big debts.
  1. Calculate what you owe. ...
  2. Cut expenses. ...
  3. Make a budget. ...
  4. Earn more money. ...
  5. Quit using credit cards. ...
  6. Transfer balances to get a lower interest rate. ...
  7. Call your credit card company. ...
  8. Get counseling.
Jan 23, 2015

Does everyone get approved for debt consolidation? ›

You'll typically need a credit score of at least 700 to qualify for a debt consolidation loan with a competitive interest rate. Although a lower credit score doesn't automatically equal a loan denial, the borrowing costs will likely be higher.

How do I get all my debt into one payment? ›

Debt consolidation loan

Banks, credit unions, and installment loan lenders may offer debt consolidation loans. These loans convert many of your debts into one loan payment, simplifying how many payments you have to make. These offers also might be for lower interest rates than what you're currently paying.

Is National debt Relief a legit company? ›

Yes, National Debt Relief is a legitimate company accredited by the Better Business Bureau and currently holds an A+ rating. It also has IAPDA (International Association of Professional Debt Arbitrators) accreditations for all of its arbitrators and an AFCC (American Fair Credit Council) membership.

Can you be denied for direct consolidation loan? ›

Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed. You are also ineligible to consolidate if your loans have been reduced to judgment (unless you vacate the judgment) or if there is a wage garnishment order against you.

What is the average credit score for debt consolidation? ›

On average, lenders usually expect a credit score of around 650 to extend a debt consolidation loan.

What is a hardship loan? ›

If your Universal Credit has been cut because of a sanction or penalty for fraud, you might be able to get some emergency money to help you cover household expenses like food and bills. This is called a 'hardship payment'. A hardship payment is a loan, so you'll usually have to pay it back when your sanction ends.

Is Freedom debt relief Program legit? ›

Freedom Debt Relief is an accredited company and has an A+ rating with the Better Business Bureau. It is a legitimate debt settlement company; however, depending on your situation its consultants may not be able to settle or lower your debt.

Does Canadian debt follow you to the US? ›

Whether you live in Canada or anywhere else in the world, your debts remain owing. Your creditors do not care if you left Canada to obtain employment in another country or to look after a sick member of your family back home.

Does Canada forgive debt? ›

Debt forgiveness is an agreement between a creditor and debtor to cancel the obligation of a debt without receiving any payment from the borrower. In Canada, many creditors will agree to write off your debt if you are unable to make your debt payments.

How long until debt is forgiven in Canada? ›

Canadian federal law states that you can no longer be taken to court over a debt if it has been six years or longer since you made a payment or otherwise acknowledged the debt. Some provinces in Canada have shorter timeframes.

Does Bank of Canada borrow money? ›

Deposit rate and bank rate

They can deposit money with us at the deposit rate for one night or borrow money from us at the bank rate for one night.

What is the rate to borrow money in Canada? ›

The current Bank of Canada lending rate is 4.5%. The prime rate for banks and credit unions is 6.70%.

Can a Canadian collection agency collect in the US? ›

International Debt Collection in Canada

CMCS has debt collection experts in accounts receivable in Canada. Canadian collection agencies are limited in their ability to collect debt in America.

What is considered a lot of debt Canada? ›

DTI helps you visualize debt severity for every income. Experts advise a DTI of 36% or less is ideal. For example, if your monthly income is $10,000, then your mortgage, auto loan, student loan, and credit card payments should come up to $3,600 or less. On the other hand, anything over 43% is too high.

How to get $30,000 out of debt? ›

  1. Focus on one debt at a time. A good starting point is to focus your energy on paying down one debt at a time while only making minimum payments on the others. ...
  2. Consolidate your debts. Another option is to consolidate your credit card debts. ...
  3. Use a balance transfer credit card. ...
  4. Make a budget to prevent future overspending.
Jul 22, 2022

Is $30,000 in debt a lot? ›

Many people would likely say $30,000 is a considerable amount of money. Paying off that much debt may feel overwhelming, but it is possible. With careful planning and calculated actions, you can slowly work toward paying off your debt. Follow these steps to get started on your debt-payoff journey.

How can I pay off $50000 in debt in one year? ›

What it takes to pay off $50,000 in debt in one year in 5 steps
  1. The benefits of paying off all your debt in a year. ...
  2. Tips to pay off $50,000 of debt in a year. ...
  3. Create a budget and track all expenses. ...
  4. Be mindful of debt fatigue. ...
  5. Prioritize paying high-interest debt first. ...
  6. Get a higher-paying new job. ...
  7. Freelance on the side.
Feb 1, 2022

Why is it so hard to get a consolidation loan? ›

As already discussed, there are three major reasons why people are denied debt consolidation loans. They don't make enough money to keep up with the payments; they have too much debt to get the loan, or their credit score was too low to qualify.

What loans are eligible for consolidation? ›

What types of loans can be consolidated?
  • Subsidized Federal Stafford Loans from the Federal Family Education Loan (FFEL) Program.
  • Unsubsidized and Nonsubsidized Federal Stafford Loans from the FFEL Program.
  • Federal PLUS loans from the FFEL Program.
  • Supplemental Loans for Students.
  • Federal Perkins Loans.
  • Nursing Student Loans.

Do all banks do debt consolidation loans? ›

Secure the money you need today with a loan from APL FCU. Whether you're looking to consolidate debt, finance a home improvement, cover unexpected expenses or treat yourself to a much-needed vacation, we can help.

Is there an app that consolidates all of your debt? ›

Tally is a mobile app that offers users a variable-rate personal line of credit to consolidate debt across multiple credit cards.

What is a disadvantage of a debt consolidation? ›

Your debt consolidation loan could come at a higher rate than what you currently pay on your debts. This can happen for a variety of reasons, including your current credit score. If it's on the lower end, the risk of default is higher and you'll likely pay more for credit.

How can I pay off my debt if I don't have enough money? ›

How to pay off debt on a low income
  1. Step 1: Stop taking on new debt. ...
  2. Step 2: Determine how much you owe. ...
  3. Step 3: Create a budget. ...
  4. Step 4: Pay off the smallest debts first. ...
  5. Step 5: Start tackling larger debts. ...
  6. Step 6: Look for ways to earn extra money. ...
  7. Step 7: Boost your credit scores.
Aug 16, 2022

Can the government pay off my debt? ›

In general, the government can't help pay off your debt directly. It provides protections from unfair debt collection, assistance with medical expenses, and other assistance programs that help with utility bills, food bills, and more.

What percentage does national debt relief take? ›

National Debt Relief says their average client pays a fee of 15% to 25% of the amount of debt enrolled in their program. However, this fee is only paid once results are achieved and debt has been settled for less than the owed amount. Generally speaking, their fee percentage is on par with the industry average.

Do credit card companies ever forgive debts? ›

Credit cards are another example of a type of debt that generally doesn't have forgiveness options. Credit card debt forgiveness is unlikely as credit card issuers tend to expect you to repay the money you borrow, and if you don't repay that money, your debt can end up in collections.

What is a federal direct consolidation loan? ›

A Direct Consolidation Loan allows you to consolidate (combine) one or more federal education loans into a new Direct Consolidation Loan for the purpose of lowering your monthly payment amount or gaining access to federal forgiveness programs.

Can you get loan forgiveness if you consolidate? ›

Consolidating federal student loans into a private consolidation loan has risks, as you will lose access to all of the benefits and protections available on federal student loans such as Income-Driven Repayment plans, Public Service Loan Forgiveness, and the pause on payments and 0% interest rate applicable on ...

How long does it take to process a debt consolidation loan? ›

The entire process typically takes between four and six weeks from the date your application is received. Before completing a consolidation application, carefully consider the following information to determine whether loan consolidation is the best option for you.

Can I get a debt consolidation loan with a credit score of 500? ›

You can get a debt consolidation loan with a credit score of 500 if you apply with a lender that does not have a credit score requirement. Alternatively some lenders for bad credit may accept credit scores as low as 580.

What are the 4 C's for debt consolidation? ›

Concept 86: Four Cs (Capacity, Collateral, Covenants, and Character) of Traditional Credit Analysis.

Does it hurt your credit score to consolidate debt? ›

Does debt consolidation hurt your credit? Debt consolidation loans can hurt your credit, but it's only temporary. The lender will perform a credit check when you apply for a debt consolidation loan. This will result in a hard inquiry, which could lower your credit score by 10 points.

Where can I get money urgently? ›

Need Money Urgently? 9 Ways You Can Get Fast Cash
  • Get a personal loan.
  • Try P2P lending.
  • Sell your unwanted possessions.
  • Withdraw cash using a credit card.
  • Avail a payday loan.
  • Sell your stocks.
  • Borrow money from friends/family.
  • Get a loan against your PPF account.
Feb 22, 2023

How many hardship loans can you take a year? ›

You can receive no more than two hardship distributions during a plan year (calendar year for all Guideline 401(k) plans). The amount requested may not be more than the amount needed to relieve your financial need, but can include any amounts necessary to pay taxes or penalties reasonably anticipated.

What is a cup loan program? ›

The Caring Unites Partners (CUP) Fund is a financial assistance program funded by partners, for partners. In times of special need, such as losing housing because of a natural disaster or fire, a major illness, a death in the family and more, a partner can apply for a grant to help with certain expenses.

How long does it take Freedom Debt Relief to work? ›

That includes negotiating settlements with your creditors and making sure creditors get paid once an agreement is reached. According to Freedom Debt Relief, it typically takes 24 to 48 months for debt settlement clients to get rid of their enrolled debt.

How long does Debt Relief stay on your credit report? ›

How long does debt settlement stay on your credit report? Debt settlement will remain on your credit report for seven years. This means that for those seven years, your settled accounts will affect your creditworthiness. Lenders usually look at your recent payment history.

How long does it take to get approved for a consolidation loan? ›

The entire process typically takes between four and six weeks from the date your application is received. Before completing a consolidation application, carefully consider the following information to determine whether loan consolidation is the best option for you.

Who qualifies for debt consolidation? ›

Borrowers must have the required income and creditworthiness to qualify, especially if they are dealing with a new lender. A letter of employment, usually a three months' bank statement is what the lender will ask from you.

How fast can I get a consolidation loan? ›

You should expect to wait around 7 business days for the entire decision and funding process to finish. Your wait could be shorter than that, or as long as a month, depending on the lender and your personal situation. Once you receive your debt consolidation loan, you'll use the money to pay off your creditors.

Do debt consolidation loans hurt your credit rating? ›

Does debt consolidation hurt your credit? Debt consolidation loans can hurt your credit, but it's only temporary. The lender will perform a credit check when you apply for a debt consolidation loan. This will result in a hard inquiry, which could lower your credit score by 10 points.

Can a consolidation loan be declined? ›

Consolidation loans are usually amortized over 3 to 5 years. This means that the payments have to be high enough to pay the loan off in 3 to 5 years. If your income can't handle that kind of a payment, you could be declined a consolidation loan.

How can I get all my debt into one payment? ›

Debt consolidation loan

Banks, credit unions, and installment loan lenders may offer debt consolidation loans. These loans convert many of your debts into one loan payment, simplifying how many payments you have to make. These offers also might be for lower interest rates than what you're currently paying.

How long is your credit bad after consolidation? ›

Information related to debt consolidation will stay on your credit report for 7 - 10+ years depending on how you handle repaying the debt. Negative information, like from late payments, will stay on your report for seven years, while accounts closed in good standing will stay for ten years.

Do you need proof of income for debt consolidation loan? ›

Proof of income – this is one of the most important debt consolidation qualifications. Lenders will want to know that you have the financial means to meet the terms of loan. Credit history – lenders will check your payment history and credit report.

How much debt do you need to consolidate? ›

There is no set amount of debt you need to have to consolidate because lenders do not have any such requirement. But for the best chance of consolidation success, your debt payments, along with your rent or mortgage payments, should not exceed 50% of your monthly gross income.

What is freedom debt relief program? ›

Freedom Debt Relief negotiates with creditors on behalf of their clients to reduce the amount of debt owed, making this a great company to work with if your credit is low and your balances have higher interest rates. Freedom Debt Relief covers most types of unsecured debt, including some student and business loans.

How can I consolidate my debt without affecting my credit score? ›

Best Way to Consolidate Debt:
  1. Ask for Help from Family/Friends:
  2. Taking a Personal Loan to Cover the Debt:
  3. Take a Home Equity Loan.
  4. Balance Transfer Credit Card.
  5. Cash Out Auto Refinance.
  6. Retirement Account Loans.
  7. Using a Debt Management Plan with a Certified Credit Counseling Agency.

What are the 3 biggest strategies for paying down debt? ›

Tips for paying off debt
  • Stick to a budget. Whatever strategy you choose for paying off debt, you'll need a budget. ...
  • Start an emergency savings account. There's nothing like an unexpected car repair coming to ruin all your plans to get out of debt. ...
  • Reduce monthly bills. ...
  • Earn extra cash. ...
  • Explore debt relief options.
Oct 31, 2022


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