A debt consolidation loan is when a person takes out a single personal loan in order to pay off other debts, such as balances on high-interest credit cards. The borrower then makes fixed, monthly payments to the lender for a set time period, usually between two to five years.

Instead of paying multiple small, unsecured loans, their new single payment is usually less than the combined ones of the previous debts, generally due to a lower interest rate. Consumers usually resort to a debt consolidation loan when they’re having a hard time making payments on multiple small loans, or are unable to negotiate a better interest rate. If their consolidation loan is secured with an asset—commonly their house—, the IRS can even offer a tax deduction.

One of the most important factors in choosing a lender for your debt consolidation is precisely whether the loan will be secured by a form of collateral—which can be easier to obtain, especially if your credit is affected—, or unsecured. Also consider possible costs and fees, such as an early repayment penalty, and the interest rate you will qualify for. Above all, compare different lenders before making a final decision, as that is the best way to get a a great deal.

If the principal is paid off more quickly than it would have been without the loan, then debt consolidation can help boost the borrower’s credit score in the long term, but this may also extend the loan's term significantly, in which case the potential savings are offset by paying more interest over time.  Opting for a secured loan puts assets in jeopardy, and if the borrowers don’t modify the habits that led them into debt, it may result in a precarious fiscal situation.

Top 10 Companies

Our Partner
9.8 / 10
  • Chosen by Almost 90% of ConsumersAdvocate Visitors
  • Our #1 Choice: 100% Satisfaction Money Back Guarantee
  • No upfront fees
  • One-on-one evaluation with a debt counseling expert
  • Reduces your debt in 24 to 48 months
  • For people with $7,500 in unsecured debts and up
  • Rated A+ by Better Business Bureau
  • Free consultation, 100% Confidential
Our Partner
9.6 / 10
  • Risk free, and no fees
  • Debt consolidation assistance
  • One low monthly payment program
  • Free debt counseling
  • 24 to 48 months debt settlement program
  • Unsecure debts of $10,000 and up
Our Partner
9.3 / 10
  • Get started quickly, no upfront fees
  • 14 years in business with BBB A+
  • Personal Account Manager to help settle your debt
  • IAPDA Certified Debt Counselors 
  • One low program payment, tailored to your budget
  • Online Client Portal, for easy 24/7 access
  • Free no pressure consultation to review all options
  • 24-48 month program, no upfront fees
Our Partner
9.3 / 10
  • Free credit consultation
  • Eliminate your debt in 30 to 60 months
  • A+ Better Business Bureau Rating
  • Debt self-help tools and financial education resources
  • 5 million Americans helped in 20 years
Our Partner
9.2 / 10
  • A+ BBB Accredited
  • Client rating 9.4 stars 
  • 100% Service Guarantee
  • Member of American Fair Credit Council
  • No upfront fees
  • Free savings quote online or by phone
  • Professional debt consultants


Our Partner
9.2 / 10
  • No upfront fees
  • Become debt-free in as little as 24 months
  • Multiple budget-friendly debt relief options
  • A+ BBB Accredited
  • IAPDA and AFCC Certified
  • Receive free financial consultation
  • Budget calculator and debt relief resources available online
Our Partner
9.2 / 10
  • Free Debt Relief Consultation
  • Member of AFCC
  • A+ BBB Accredited Company
  • Options of Debt Relief Programs to Choose From
  • Money Back Guarantee
  • Easy Two-Step Online Application
Our Partner
9.2 / 10
  • Free consultation
  • Member in “Good Standing” by the OBB
  • Debt consolidation assistance
  • Money back guarantee
  • IAPDA and AFCC accredited
Our Partner
9.0 / 10
  • Free credit counselling services
  • $5,000 minimum debt
  • No credit score qualifications
  • Consolidate multiple debts into one account
  • Debt management and bankruptcy assistance
Our Partner
9.0 / 10
  • Debt consolidation loan calculator
  • Loan terms from 3 months to 15 years
  • Get loan amount from $1,000 to $35,000 is as fast as 24 hours.
  • Compare up to 5 quotes without obligation
  • Debt consolidation loan rates from 5.99% to 35.99%
  • Multiple Debt Consolidation Loan options
  • Large network of lending institutions and banks to choose from
  • A+ BBB Accredited
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How We Compare Debt Consolidation



The International Association of Professional Debt Arbitrators (IAPDA) ensures that a company’s debt consultants are trained and certified debt negotiation professionals.  

The American Fair Credit Council (AFCC) – member companies should comply with best industry practices. This includes transparency with the public and compliance with FTC regulations for debt relief providers.

Better Business Bureau (BBB) – gives an overview of customer experience with the company. This includes complaint reports and how the company was able to resolve customer concerns.



A company’s time in business is a good indicator of its debt relief program’s performance.



How soon can a company successfully resolve your debt situation? Of course the success of the program depends largely on a client’s commitment in making the monthly payments.



Part of being an AFCC member requires the company to be transparent in terms of its fees and policies. We scored companies according to how they gave answers to:

  • Program costs
  • Number of client’s that drop out of the program
  • Average length of the program
  • Average settled amount

Debt Qualifications


Unsecured debt – this refers to debt that are unattached to personal assets such as mortgages or car loans.

  • Medical bills
  • Personal lines of credit
  • Credit cards
  • Old repossessions
  • Student loans

Minimum debt – debt relief companies require clients to meet minimum debt limits to be enrolled in the program. This also refers to your total enrolled debt. Lower debt minimums allow more clients to qualify for the program.



The Federal Trade Commission (FTC) has taken steps to protect consumers against companies that charge fees prior to settling or reducing a client’s unsecured debt. The 2010 FTC Rule for Debt Relief Providers state the no fees and charges can be collected unless:

  • The debt relief service successfully settles or changes the terms of at least one of the consumer’s debts.
  • There is a settlement agreement, debt management plan, or other agreement between the consumer and the creditor that the consumer has agreed to.
  • The consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider.
  • The new rule also has provisions to ensure that debt relief providers do not front-load their fees if a consumer has enrolled multiple debts in one debt relief program.

Upfront Fees – FTC guidelines strictly prohibit the collection of fees prior to the company being able to successfully settle a debt.

Fees and charges – a percentage of the client’s total enrolled debt. However, fees should only be collected once a debt is settled in line with FTC regulations.

Monthly payments – this refers to the monthly amount to be deposited which is determined by you and your debt consultant. Funds are used for negotiating with your creditors and making a lump sum payment once a settlement is reached.

FDIC insured deposits

Included in the FTC guideline is a provision concerning the creation of a “dedicated account.” This refers to the creation of a monthly payment account to be used for paying creditors and where “provider fees” are to be collected. FTC rules state that a dedicated account can only be created if it meets these conditions: 

  • The account is maintained at an insured financial institution
  • The consumer owns the funds (including any interest accrued)
  • The consumer can withdraw from the debt relief service at any time without penalty and receive all unearned provider fees and savings within seven business days
  • The provider does not own or control or have any affiliation with the company administering the account
  • The provider does not exchange any referral fees with the company administering the account.



Consultation with a debt specialists

Debt Consolidation – this involves taking out another loan to pay for your existing loans.

  • Reduce monthly payments
  • Lower interest rates
  • Simplify payments

Debt Settlement – is a debt relief program that helps make debt payments easier by helping you reduce your total debt mainly by negotiating with creditors.

  • Reduce total unsecured debt
  • Alternative to debt consolidation, credit counseling and bankruptcy
  • One low monthly payment
  • Settle your debt in 24 to 48 months



Another thing to look out for when choosing a debt relief service is the type of support services they provide. Work with debt relief services that provide you a personal debt consultant that is responsible for handling you case. Client support should also be available through email, telephone or online chat option.