You did everything right.
You researched.
You compared.
You found a company with good reviews.
They said you "pre-qualified" for debt consolidation.
Lower payments.
One monthly bill.
Finally… relief.
So you called.
And then something shifted.
"Well, based on your situation, you don't quite qualify for the loan… but we have this special program that might work even better for you."
And you're sitting there thinking…
...Wait, what just happened?
Here's what almost no one tells the woman who just wanted one straight answer…
There are two completely different things called "debt consolidation."
One is a loan.
One is a program.
They sound the same.
They're marketed the same.
But they work completely differently.
And most companies don't explain which is which until you're already on the phone.
Let me show you both.
So you know what you're actually signing up for.
And which one fits your life.
First… the loan version.
A debt consolidation loan works like this:
You borrow money.
You use it to pay off all your credit cards.
Now you have one monthly payment to the loan company.
Ideally at a lower interest rate than what you were paying.
When does this actually work?
Your credit score is decent — at least 670.
You're current on everything.
Your debt-to-income ratio isn't sky-high.
The interest rate they offer is actually lower than your current cards.
Here's where it gets tricky…
If you're already behind on payments?
Your utilization is maxed out?
Your credit score is in the 600s or lower?
You might still get approved for a loan…
...But the rate could be 18%. 22%. 25%.
Plus an origination fee.
Which means you're not actually saving money.
You're just moving debt from one place to another.
Why do you think they approved you for that rate?
Because they're making money off you.
Not necessarily helping you.
The pros when the rate is actually good:
One monthly payment instead of five or six.
Lower interest means more goes toward principal.
Paying off revolving credit can help your credit score.
You don't have to fall behind.
The cons:
You might not actually save money if the rate is bad.
You need decent credit to get a good rate.
You're at risk of using those credit cards again now that they're paid off.
It doesn't solve the root problem if there's a cash flow issue.
Now… the program version.
This is where the confusion happens.
Because it's also called "debt consolidation"…
...But it works completely differently.
Here's what actually happens:
You work with a company.
You stop paying your creditors directly.
Instead, you put money into a special savings account each month.
Over time, that account grows.
Then the company negotiates settlements with your creditors.
"She owes you $10,000. She can't pay the full amount. Would you accept $5,000?"
When they agree?
You pay the settlement from your savings account.
Account closed.
This is debt settlement.
Not a loan.
But it gets called "debt consolidation" because you're consolidating payments into one monthly deposit.
Here's the important part…
This isn't a bait-and-switch.
It's just that the company needs to see your situation before they know which option fits.
If your credit is good and you're current?
They'll try to get you a loan.
If your credit is lower or you're already struggling?
They might recommend the settlement program instead.
Both can work.
They're just for different situations.
When does debt settlement actually make sense?
You're already behind or you're about to fall behind no matter what.
You can't qualify for a loan with a decent rate.
You're okay with your credit taking a hit (it probably already has).
You understand you might face lawsuit risk while accounts are past due.
You're working with a reputable company that's transparent about fees.
What a good debt settlement company will do:
Tell you upfront this isn't a loan.
Explain the fee percentage clearly (usually 15-25% of enrolled debt).
Show you realistic timelines (3-5 years).
Explain your lawsuit risk based on your specific creditors.
Help resolve lawsuits if they happen.
The pros when it fits your situation:
You can reduce what you owe — sometimes significantly.
One monthly payment.
A clear path to debt-free in 3-5 years.
It works when loans aren't an option.
The cons:
Your credit score will take a hit while accounts are past due.
You could face lawsuits from creditors.
You might have a tax obligation on forgiven debt.
Fees are typically 15-25% of what you enrolled.
So here's the real question…
Which one is right for you?
Choose a debt consolidation loan if:
Your credit score is at least 670.
You're current on everything.
You can qualify for a rate lower than what you're paying now.
The math actually saves you money after fees.
Choose a debt settlement program if:
You're already behind or about to be.
You can't qualify for a loan with a good rate.
You understand the credit impact and lawsuit risk.
You're working with a company that's transparent about what this actually is.
But here's what a lot of people don't know…
There's a third option that almost nobody mentions.
If you owe credit cards…
And you can't qualify for a good loan…
But you're still current and don't want to fall behind…
There's something called nonprofit debt management.
It's not a loan.
It's not debt settlement.
It's a program where nonprofits negotiate lower interest rates with your creditors.
You stay current.
Your interest drops from 22% to maybe 7%.
One monthly payment.
Debt-free in 3-5 years.
No lawsuit risk.
No intentionally falling behind.
Most people don't even know this exists.
Why do you think it's not advertised as much?
Because companies make less money from it.
But it might be exactly what you need.
You're smart enough to know what you don't know…
...And what you don't know yet is which option actually fits your situation.
Not which one sounds better in an ad.
Which one works for YOUR life.
Here's how to find out…
We built a free calculator.
Takes about 2 minutes.
It shows you:
What a debt consolidation loan would cost…
What debt settlement would cost…
What nonprofit debt management would cost…
What bankruptcy would cost…
The credit score impact for each…
The monthly payment for each…
The total cost for each…
All based on YOUR situation.
Not someone else's.
Yours.
No email required unless you want to talk to someone.
You've been carrying this weight long enough, mama.
You don't need to figure this out alone.
And you definitely don't need to guess which option is which.
Click below and let's see what actually makes sense for you.
P.S. When you see all your options laid out…
...You're going to feel the confusion lift.
Because knowing what you're actually choosing is half the battle.
I'll be here when that happens.
You're already doing the hardest part.
