Debt Management Plan vs Debt Consolidation Loan
Compare nonprofit debt management programs with debt consolidation loans. Learn the differences in cost, credit impact, and effectiveness.
Debt Management Plan
- No credit score requirement
- Nonprofit counseling included
- Creditors may lower rates
- Waived late fees
- Professional negotiation
- Monthly fees ($25-50)
- Must close credit cards
- Takes 3-5 years
- Noted on credit report
People with poor credit who need professional help managing debt
Debt Consolidation Loan
- Keep credit cards open
- Fixed interest rate
- Choose your own term
- No counseling required
- Not noted on credit report
- Requires fair-good credit
- May have origination fees
- Must qualify independently
- Temptation to rack up new debt
People with fair-good credit who want independence and flexibility
Our Verdict
A debt management plan is better if you have poor credit or need guidance. A consolidation loan is better if you have decent credit and want to manage independently.
Not sure which is right for you?
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