Debt Review vs Debt Consolidation: Which is Right for You?

Debt Review vs Debt Consolidation

Both options help you manage debt, but they work very differently. Understanding the distinction helps you make the right choice.

What is Debt Consolidation?

Debt consolidation means taking out a new loan to pay off all your existing debts. You then have one monthly payment to the new lender.

Pros:

• Single monthly payment
• Potentially lower interest rate
• No legal process involved

Cons:

• You need good credit to qualify
• You're taking on MORE debt
• No legal protection from creditors
• Easy to fall back into debt

What is Debt Review?

Debt review is a legal process where a debt counsellor restructures your existing debts without taking on new debt.

Pros:

• Legal protection from creditors
• Assets protected from repossession
• Reduced interest rates negotiated
• No new debt required
• Regulated by the NCR

Cons:

• Cannot take on new credit during the process
• Affects your credit score temporarily
• Takes 3-5 years to complete

Quick Comparison

Which Should You Choose?

Choose Debt Review if:

• You're struggling to meet minimum payments
• You're worried about losing your car or home
• You don't qualify for new credit
• You want legal protection

Choose Debt Consolidation if:

• You have good credit
• You can comfortably afford a new loan payment
• You don't need legal protection
• Your debt is manageable but scattered

The Honest Truth

Debt consolidation often leads people into more debt because it doesn't address the underlying problem. You end up with a consolidation loan AND new credit card debt.

Debt review forces a reset. You can't take on new credit, which helps you develop healthier financial habits.

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Not sure which option suits you? Book a free consultation and I'll honestly assess your situation—even if debt review isn't the right answer for you.