How Debt Consolidation Loans Work

Debt consolidation combines all your loans and bills into a single consolidated debt loan. The loan is repayed according to a schedule called a Debt Management Plan.

Debt Management Plans [DMP]

In a DMP, a schedule of monthly payments is developed between the DMP organisation, you, and your creditors.

You then deposit money each month with the credit counseling organization.

The agency uses your deposits to pay your unsecured debts, such as credit card bills, student loans, and medical bills, according to the payment schedule.

Counselors will provide you with a free budget analysis to help you determine if the debt management program is right for you.

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