Side by side
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.
Smart Debt Relief Editorial Team
Debt Management Plan
Suits: People with poor credit who need professional help managing debt
Upsides
- +No credit score requirement
- +Nonprofit counseling included
- +Creditors may lower rates
- +Waived late fees
- +Professional negotiation
Downsides
- –Monthly fees ($25-50)
- –Must close credit cards
- –Takes 3-5 years
- –Noted on credit report
Debt Consolidation Loan
Suits: People with fair-good credit who want independence and flexibility
Upsides
- +Keep credit cards open
- +Fixed interest rate
- +Choose your own term
- +No counseling required
- +Not noted on credit report
Downsides
- –Requires fair-good credit
- –May have origination fees
- –Must qualify independently
- –Temptation to rack up new debt
Our take
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.
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