Best Debt Consolidation Companies For Low Income Families 

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Learn how you can ease their financial burden with the best debt consolidation companies for low income families. Learn about application processes & benefits.

Do you know that many low-income families have a hard time managing several debts? This can cause a lot of stress because they are always making payments that barely cover the interest, let alone the actual debt. This ongoing struggle can make it seem impossible to achieve financial stability.

Debt consolidation can help by combining all your debts into one single, easier payment. This not only makes paying back your debts simpler but can also lower the interest rate and monthly payments. This way, it becomes easier for you and your family to manage your finances.

In this blog post, we will look at the best debt consolidation companies for low-income families. We’ll give you all the information you need to make a smart choice and start your journey towards financial freedom.

Table of Contents

What Is Debt Consolidation?

A debt consolidation plan helps you make your monthly payments easier and change your loan terms. With this plan, you can get a bank loan or join a debt relief program. 

It lowers your interest rates and reduces the time you spend managing different credit accounts. Combining your eligible debts into one payment makes your life simpler, and debt consolidation helps you do this easily.

Debt consolidation is a great way to handle and quickly pay off multiple debts. It lets you combine them into one loan with a fixed interest rate and a single monthly payment. This way, you don’t have to worry about multiple bills and due dates, and you might save money on interest too.

How Does Debt Consolidation Work?

Debt consolidation helps you by putting all your bills together into one easy payment. You can do this with a loan or a debt relief program. This way, instead of paying many bills, you only make one payment each month. 

Plus, you get a lower interest rate, which makes it cheaper and faster to pay off your debt if you do it right.

When is the best time to get a debt consolidation loan?

There are three times when debt consolidation can be really helpful for you.

First, if you have a lot of credit card debt, you might want to use debt consolidation to lower the amount of interest you pay and boost your credit scores.

Second, if you’re tired of keeping track of many different bills, you can use debt consolidation to combine your credit card bills, medical bills, and other debts into one simple payment with a clear payoff date.

Lastly, if you want to pay off your debt quickly and can handle a higher payment, a debt consolidation loan can help you get rid of your debt in one or two years.

What Kinds of Debt Can Be Consolidated?

Most debt-relief companies can help you settle unsecured debts like:

  • Credit card debts
  • Personal loans that are not secured
  • Payday loans
  • Medical bills
  • Department store credit cards
  • Accounts in collections
  • Certain utility bills

Some companies will ask that you have a minimum amount of unsecured debt. Usually, debt consolidation companies can’t help with mortgages, secured personal loans, or car loans.

What Kind of Debts Can’t Be Consolidated?

You can’t use debt consolidation for all types of debts. If you have a business with a lot of debt, debt consolidation won’t help. These programs are meant for people with personal, unsecured debt, like credit card debt. 

Most lenders also won’t include student loans, but some might make exceptions. Finally, you can’t use debt consolidation loans for anything illegal.

Eligibility Criteria for Debt Consolidation

Even if you have the right debt, your credit profile might not be eligible for debt consolidation. A low credit score alone won’t necessarily disqualify you, but here are some things to think about to have the best chance at a smooth process.

  • Proof of Income: Companies need to know you make enough money to pay off the loan. They will usually want to see that your income is more than your expenses.
  • Financial Stability: Companies want to see that you’re on the right path before giving you a low-interest loan. This could mean having a long-term job or significant savings.
  • Credit History: You need some kind of credit history to get a debt consolidation loan. Lenders will check your credit report to see how you spend and repay money.
  • Equity: Some companies might ask for equity, like a home or car, to qualify for bigger loans.


Prequalification is a great way for you to check out loan options without hurting your credit score. When you apply for a new loan, lenders usually do a hard credit check, which can lower your score. 

But with prequalification, they only do a soft credit check. This means you can see your rate first and decide if it’s right for you. It also helps you compare different loan amounts, repayment terms, and interest rates without affecting your credit.

Debt Consolidation Options

There are a few ways you can combine your debt into one, depending on your money situation and if you can budget and pay on time every month. Here are some options:

  • Debt Management Programs: These are run by nonprofit groups that help you manage your debt better.
  • Debt Consolidation Loans: You can get a loan to pay off all your debt, like a personal loan, home equity loan, or using a balance transfer credit card.
  • Debt Settlement: This is where you negotiate with your creditors to pay less than what you owe.
  • Bankruptcy: This is the last resort and should only be considered if you can’t pay back your debts at all.

It’s important to think carefully about which option is best for you and to talk to a grown-up you trust, like a parent or a financial advisor, before making any decisions.

Benefits and Disadvantages of Debt Consolidation Programs

When you consolidate your debt, you combine all your bills into one payment each month. This means you only have to worry about remembering to pay one bill, instead of several.

Here are some good things about debt consolidation:

  • Lower Interest Rates: You might get a new interest rate that is lower than what you were paying before. This could make your monthly payment lower too!
  • Affordable Payments: With a lower interest rate, your monthly payment might be more affordable. This can help you pay off your debt faster.
  • Improve Your Credit: Paying on time can help improve your credit score. This is important for getting loans or credit in the future.

But, there are a few things to be careful about:

  • Using Credit Cards Again: When you pay off your credit cards, you might be tempted to start using them again. It’s important to be careful and not get back into debt.
  • Fees: Sometimes, there are fees for getting a debt consolidation loan. These fees can add to the total cost of your loan.
  • Making Payments on Time: It’s really important to make your payments on time every month. If you don’t, you might have to pay extra fees.

If you stick to your debt consolidation plan and make your payments on time, you can pay off your debt and improve your financial situation!

Best Debt Consolidation Companies For Low-Income Families

National Debt Relief

Credits: National Debt Relief

National Debt Relief is a great choice if you need help with your debts! They are ranked as the best debt settlement service overall because they score high in all the important categories. They charge low fees, which are only between 15% to 25% of the debt they settle, not the total amount. 

They can help with many types of debt, including some student debts. While many companies can help with credit card debt, National Debt Relief is the best for credit card debt according to their high score.


  • They are the best at working with credit card debt.
  • They have the lowest fees compared to other top companies.
  • They can refer you to other debt solutions.
  • They work in most states.


  • They don’t have a live chat option.
  • They are not available in Oregon, Vermont, or West Virginia.
  • They don’t tell you about savings account fees.


Credit: CuraDebt

If you’re looking for a debt relief company, CuraDebt could be a good choice. Even though their website might look old, they’ve been helping people with debts since 1996, which is a long time! They can help with different types of debts, like tax debts, which not all companies can do.

CuraDebt is the best company for tax debt help, and they work in all 50 states. For other types of debt, they work in fewer states, but they still help a lot of people.


  • They can help with many types of debts.
  • You can chat with them live if you have questions.
  • They are accredited by the AFCC and IAPDA.


  • They only work in 26 states and Washington, D.C.
  • Their website can be confusing because it’s old.


Credit: Upstart

Upstart is a good choice for you if you don’t have a credit history yet. They look at things like your job and education, not just your credit score when you apply. You can borrow as little as $1,000 with Upstart, which is great if you only need a small loan.

Before you apply, you can check what interest rate you might get without affecting your credit score. 

Upstart says that 99% of the time, you’ll get your loan money the next business day after you sign everything. But be aware, the fees for getting the loan started could be a bit high, depending on your loan terms.


  • They’ll work with you even if you have a fair credit score (as low as 300)
  • They’ll consider you even if you don’t have much of a credit history yet
  • There are no fees if you pay off your loan early
  • Almost all loans are sent out the next business day if you finish everything before 5 p.m. on a weekday


  • The fees for paying late are pretty high
  • They might take out a fee of 0% to 10% from your loan amount before giving it to you
  • If you want paper copies of your loan agreement, you’ll have to pay $10

Accredited Debt Relief

If you need help with debt, Accredited Debt Relief is a good choice. They’re part of Beyond Finance, a company that offers similar services. Accredited Debt Relief stands out for its great customer service. 

They offer many ways to reach them, like live chat, phone, email, mail, and even fax! People who have used their services in the past have given them good reviews.

It’s easy to get in touch with Accredited Debt Relief’s customer support. You can call them any day from 8:00 a.m. to 11:00 p.m. ET (until 10:00 p.m. on weekends). This makes it easier to get help when you need it.


  • They have excellent customer service.
  • People like their services and have given them good reviews.
  • They work with many different types of debts.


  • You need to have at least $10,000 in debt to use their services.
  • They don’t clearly explain all the fees for their savings accounts.


Credit: LendingPoint

If you need money fast but your credit score isn’t great, you might want to think about LendingPoint.

You can see what kind of loan terms they offer without affecting your credit score. Once you apply, they’ll tell you if you’re approved quickly. Then, you should get the money in just one business day.

Keep in mind, though, that LendingPoint requires you to earn at least $35,000 a year, and they don’t give loans in Nevada and West Virginia.


  • Applying is quick, and they approve you on the same day.
  • You might get your money the next day (after they check and approve all your documents).
  • They might say yes even if your credit score is as low as 620.
  • They only do a soft check to see if you qualify.
  • You won’t get charged extra for paying off your loan early.


  • There could be fees when you start your loan, ranging from 0% to 8%.
  • You can’t get a loan from them if you live in Nevada or West Virginia.
  • You need to have a social security number.
  • They don’t offer loans that two people can apply for together.

Freedom Debt Relief

Freedom Debt Relief is a company that helps people like you who have different kinds of debts, like loans and credit cards. They’ve been around for 20 years and say they’ve helped over a million people get rid of $18 billion in debt!

If you owe money to different companies, Freedom Debt Relief talks to them for you and tries to make deals to lower how much you owe. If they’re successful, they’ll charge you a part of what you originally owed, not just what you end up paying.


  • Lots of people say they’re great.
  • They’re honest about their fees.
  • They can help you with many different types of debts.


  • They can’t help everyone because they’re not allowed to work in 8 states and Washington D.C.
  • Sometimes, the extra fees you have to pay each month can add up.


Credit: Avant

If you need to consolidate your debts without paying a lot upfront, Avant could be a great choice. While some other lenders charge 7% or more in fees, Avant charges 4.75% or less. This means you could save a lot of money, especially if you’re borrowing a large amount.

Another great thing about Avant is how quickly you can get your money. If you’re approved by 4:30 p.m. CT on a business day, you’ll get your funds the next day. Plus, you can check if you prequalify without it affecting your credit score.


  • They lend to people with lower credit scores.
  • There are no fees for paying off your loan early.
  • You can check if you prequalify without it affecting your credit score.
  • You can get your money quickly, often by the next day.
  • They offer a 10-day grace period for late payments.


  • There is an origination fee.
  • The interest rates can be high, up to 35.99% APR.
  • There is no discount for automatic payments.
  • They don’t make payments directly to your creditors for debt consolidation.

Pacific Debt Relief

If you’re looking for help with debt settlement, Pacific Debt Relief could be a good option. Their settlement fees are similar to our top pick, ranging from 15% to 25% of the settled debt. 

Even though their website says they charge based on your total enrolled debt, a company representative confirmed they charge based on the amount of settled debt, which can be cheaper for you.

Many people have given Pacific Debt Relief positive reviews online. About 1,500 people rated them an average of 4.7 out of 5 stars. Their reviews with the Better Business Bureau (BBB) are even higher at 4.93 out of 5 stars, based on a similar number of reviews.


  • Their debt settlement fees are among the lowest.
  • They have over 20 years of experience, founded in 2002.
  • Customers seem to be very satisfied with their services.


  • You need to have at least $10,000 of debt.
  • Their services are only available in 28 states and Washington D.C.

How to Choose a Debt Consolidation Loan?

Choosing a debt consolidation company can feel tough, but you can make it easier by following these steps:

Step 1: Do Your Research

Look at different lending options online and offline. Don’t just go with the first offer. Think about your financial situation and make sure the choice you make solves your problems.

Step 2: Know Your Strengths

If you have enough money to pay off debt but need help getting started, a debt management program might be better than a loan or settlement.

Step 3: Understand Your Weaknesses

If you have a lot of overwhelming debt, including payday loans, debt settlement might be the best option for you.

Step 4: Make a Thoughtful Choice

Understand the benefits of the solution you choose. It’s important to find a program that offers the kind of consolidation you want, makes you feel comfortable, and educates you to avoid future problems.

Step 5: Be Realistic About Time

Consolidation can take 3 to 5 years to erase debt. It could be faster if you can put more money toward paying it off. Just like you didn’t get into debt quickly, you won’t get out of it quickly. Focus on making good spending choices and paying your debt on time.

Getting rid of debt is a big challenge. Ask for help when deciding which path is best for you. Nonprofits offer free counseling with no strings attached.

What to Look for in a Debt Consolidation Company?

To succeed in debt consolidation, it’s important to have a good relationship with the people you owe money to and be determined to manage your money wisely.

Customer Service

If you’re looking for a good company to help with your debts, they should make you feel comfortable. They should give you clear answers and have a good reputation for being honest and successful. The people who help you should be trained and certified.

It’s important to know how they get paid. If they get bonuses for selling you more things, be careful. They should also teach you about why you have debt problems and show you how to avoid making the same mistakes.


When choosing a debt consolidation company, look for one that tells you everything about how they work and is happy to share information to back up what they say. You can often see how open a company is by checking its website.

A good debt consolidation company’s website will have these things:

  • How long they’ve been around – this shows if they’re stable.
  • Who they are – look for a page with the top bosses’ names, the company’s address, when they’re open, and their phone number.
  • What they offer – do they do loans, or do they focus on helping you manage your debts?
  • How much it costs – check for all the fees you might have to pay, like the origination fee, monthly fee, or late payment fee. If they do loans, what’s the interest rate?
  • How long it takes – how many months will it take to pay off your debt? If you get a loan, will you get a penalty if you pay it off early?
  • Who can use it – is there a minimum or maximum amount of debt you need? Do you need a certain credit score? Does it cover all your debts or just some?
  • How they help you – will you have someone to talk to about your debts? Can you talk to them online or with your phone? Are there reviews from other people about how well the company works?

If a company is honest and open, they won’t have a problem showing you all this information. They want to help you understand how they can help you with your debts.

Longevity and Trustworthiness

If a company has been around for 10–15 years, it means they’ve earned trust from customers. They stick to their beliefs, values, and performance, which is why they’re still in business. They focus on providing solutions to help you.

Many companies that help with debt consolidation are accredited by the Better Business Bureau (BBB) and have A-plus ratings. The BBB is a useful resource that rates companies based on how many complaints they get and how well they resolve them. This can help you decide which company to choose.

It’s important to make sure the company you pick is accredited by the American Fair Credit Council or the International Association of Professional Debt Arbitrators. These organizations make sure companies follow rules to protect you from unfair practices or fraud.

Counseling and Education

Choosing a debt consolidation company is important, and one thing to consider is if you will learn how to avoid future financial problems. Nonprofit organizations are great at educating and counseling people about debt consolidation. 

Nonprofits must offer educational services to keep their tax-exempt status. They do this by providing credit counseling, usually for free. Counselors look at your finances to understand what caused your money issues and how budgeting can help. 

Make sure the counselors at the company you choose are trained and certified. If you have certification questions, you can contact the National Federation for Credit Counseling (NFCC).

Avoiding Debt Consolidation Scams

As you explore the world of debt relief, it’s important to be aware of scams. Here are some things to watch out for when choosing a company or service:

  • Nonprofit Claim: Some companies claim to be nonprofits when they’re for-profit businesses.
  • Guaranteed Debt Settlement: Be cautious of companies promising to settle your debt for just a few cents on the dollar.
  • Upfront Fees: Avoid companies that ask for fees before reaching a written agreement with your creditors.
  • Aggressive Sales Tactics: Some companies may pressure you with quick decisions. Remember, it’s important to take your time and do your research.
  • Quick Fix Promises: Be wary of companies promising a “quick fix.” Debt relief programs usually take between three to five years.

By staying informed and cautious, you can protect yourself from these common red flags in the debt relief industry.

Alternatives to Debt Consolidation

Debt consolidation can help you manage your finances better if you have a steady income, even if your credit score isn’t perfect. However, not everyone will qualify for this option. Some may not earn enough to cover the monthly payments, while others might find different solutions that suit their needs.

Credit counselors can guide you through your options and help you decide if debt consolidation is right for you. Here are some other options to consider if debt consolidation isn’t the best fit for you:

Credit Counseling

Credit counseling is a service offered by debt consolidation companies that can be free or low-cost. Counselors will look at your credit report and help you create a budget that balances your income and expenses. 

They might suggest enrolling in a debt management program or getting housing or bankruptcy counseling.

Debt Payoff Strategies

It’s important to have a plan when paying off your debts. Simply making payments without considering interest rates or the total amount you owe per account can end up costing you more in the long run. 

Strategies like the debt snowball or debt avalanche can help you pay off your debts faster. Use a loan calculator to figure out your monthly payments.

Mortgage Refinancing

If you have a mortgage, you might be able to refinance it for a larger amount and use the extra money to consolidate your debts. This is known as a “cash-out refinance.” Keep in mind that most lenders require a credit score of at least 620 to qualify.

Negotiating with Your Lenders

If you’re struggling to manage your debts, don’t hesitate to talk to your lenders and credit card issuers. 

While they’re not obligated to help, they may be willing to lower your interest rate, set up a payment plan, or make other arrangements to help you manage your loan. 

It’s always best to keep an open line of communication with your financial institutions.

Balance Transfer Credit Cards

Some credit cards allow you to transfer the balance from other cards to a new one with a lower interest rate. Many offer 0% interest for a period of 12 to 18 months, giving you time to pay off your debts without accruing interest. 

Be aware of transfer fees, which are usually around 2% to 3% of the amount transferred.

Home Equity Loan or Home Equity Line of Credit (HELOC)

If you own a home, you could consider a home equity loan or HELOC. These options often have lower interest rates than other types of loans, but remember that your home is at risk if you fail to make payments.

401k or Retirement Loans

Some retirement plans allow you to borrow up to 50% of your 401k and give you up to five years to pay it back without facing early withdrawal penalties from the IRS. 

However, keep in mind that borrowing from your retirement savings means losing out on potential investment returns, as your money won’t be earning interest anymore.

Ways to Consolidate Debt without a New Loan

Being debt-free means not owing any money. There are different ways to reach this goal if you owe money to different people or companies. Here are some ways:

1. The Debt Snowball

Start by paying off the smallest amounts you owe. As you pay off these small amounts, you’ll have more money to pay off the bigger amounts.

2. The Debt Avalanche

Pay off the debts with the highest interest rates first. This might take longer, but you’ll pay less money overall in interest.

3. Chapter 13 Bankruptcy

If you can’t manage your debt but still have some income and assets you want to keep, you might consider filing for Chapter 13 bankruptcy. This means you’ll make payments to your creditors for a few years, and then your debt might be forgiven.

4. Chapter 7 Bankruptcy

If your situation is really bad and you can’t pay your debt at all, Chapter 7 bankruptcy might be an option. This can help you get rid of most of your debt, but you might lose some of your belongings, like your home or car.

How does the Federal Reserve impact debt consolidation loans?

If you have a lot of high-interest credit card debt from last year, you might save more money with a debt consolidation loan in 2024. The Federal Reserve is expected to lower rates twice in the second half of the year, which could mean lower loan rates for you.

In 2023, even though interest rates were higher, many people still borrowed personal loans. They borrowed an average of $11,281, the highest average ever, according to TransUnion data. 

People with excellent credit borrowed personal loans more than ever last year. The number of personal loans given to people with excellent credit went up by 20 percent from 2022.


Consolidating your debt might seem tough if your credit score isn’t perfect. But don’t worry, you can still get a debt consolidation loan even with a low score.

Before you apply for a debt consolidation loan, it’s important to do some calculations. Look for the APR (Annual Percentage Rate) and consider any origination fees. This will help you figure out if a debt consolidation loan will save you money.

There are other ways to deal with your debt. If you found this post helpful, please share it with others. If you know of any other helpful companies, please share them in the comments to help others too.


Are There Free Government Debt Consolidation Programs?

You might be wondering about debt consolidation programs and the government’s role in them. Well, the government isn’t directly involved in these programs. However, it does offer grants to nonprofit credit counseling agencies. These agencies help people like you solve credit card debt issues.

Can I apply for debt consolidation with bad credit?

You can get a loan to combine your debts even if your credit isn’t great (a score below 670). But be careful about the details. Sometimes, the interest you pay on these loans can be higher than what you pay on credit cards, especially if your credit score is low.

Why can’t I get a debt consolidation loan? 

Even with a loan that combines all your debts into one payment, called debt consolidation, approval isn’t guaranteed if you have bad credit. Lenders usually consider several things when they look at your loan application. 

You might not get approved if you don’t earn enough money or if you already owe a lot compared to what you earn.

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

When you apply, you’ll usually hear back from the lender in a few days. Some lenders might even approve you right away! To make things go smoothly, be sure to send in any papers the lender needs and answer their questions quickly if they ask for more information.

How to choose the best debt consolidation loan?

When you’re picking a lender or financial product, it’s important to shop around. Don’t just focus on the APRs when choosing the best debt consolidation loan for you. While the interest rate is often the main thing to consider, you should also look at other costs of the loan. 

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Sabrina is a former campaign manager who has decided to focus her effort to help people contact senators and get help. She leads our Editorial Team with Ronald and Lawrence to curate content and resources that help us navigate the system.

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