Debt consolidation is an effective way to get relief from high-interest debt. However, unless you have student loans, there are no free government debt consolidation programs. Debt relief is rarely, if ever, free.

There are other ways to consolidate your debt if you have large credit card balances, medical bills, or personal loans. Read on to learn more about your options.

Do Free Government Debt Consolidation Programs Exist?

There are no credit card debt relief government programs or other types of programs that can help individuals manage their debt better. However, if you have federal student loans, there may be some options.

Federal Student Loan Debt Consolidation

If you have multiple federal education loans, you may be able to consolidate them through Direct Consolidation. Most loans, including Perkins, Stafford, and Direct loans, are eligible for consolidation.

There’s no application fee, and you’ll be able to roll all your loans into a new loan with a single installment. A government debt consolidation program may also lower your monthly payment by increasing your term. However, you may pay more in interest overall.

One of the drawbacks to keep in mind is that if you had any previous benefits like loan cancellation, interest rate discounts, or rebates, you may lose them when you consolidate your loans.

Are There Any Government Debt Relief Programs?

“Outside of student loans, the government doesn't offer any debt relief programs,” explains Teresa Dodson, financial expert and founder of Greenbacks Consulting. “Your best bet is to check if your state offers anything, then do some research on your own to determine what debt relief programs are right for you,” she encourages.

While the government doesn’t offer free money or debt relief for consumer credit, federal grants are usually available for organizations and states. However, you may be able to get an education loan or receive assistance for some types of medical debt, VA home loan debt, and student loan debt.

The federal government offers student loan debt forgiveness for people in certain types of jobs. If you’re a veteran who has a VA loan and are finding it difficult to make payments, you may be able to get help to avoid foreclosures.

For medical debt, government health insurance programs like CHIP, Medicare, Medicaid, and the Affordable Care Act may be able to help with medical expenses.

Other Relief Programs That Can Serve as an Alternative to Government Debt Consolidation

While there are no free government debt consolidation programs, there are other relief programs you can use as an alternative.

Non-Profit Debt Consolidation Programs

Nonprofit organizations that offer counseling services can also help you consolidate your debts through a debt management plan (DMP). This is a good option if you have bad credit and can’t qualify for a personal loan for consolidation.

A certified credit counselor can take a look at your finances and enroll you in a program if it's suitable. They’ll set up a repayment plan with your credit card companies and try to lower your interest rate. You’ll make a single payment each month to the credit counseling agency, which will then be distributed to your creditors.

Online Debt Consolidation Programs

Debt consolidation programs are also offered by for-profit companies that specialize in helping individuals manage their debts.

You can also borrow a consolidation loan from online lenders and use the funds to pay off your debts. You’ll then have a single payment each month. These are fixed-rate personal loans with repayment terms ranging from 12 to 84 months.

The annual percentage rate (APR) for personal loans can vary depending on the lender, your credit score, income, and other eligibility factors. We recommend comparing your loan options carefully to find one that offers lower interest rates compared to your current debts so you can benefit from consolidation.

Make Your Debt Manageable With Non-Profit or Private Debt Consolidation Programs When The Government Can’t Help

Even though there are no free government debt consolidation programs other than for student loans, you can make your debt manageable with programs offered by private debt relief companies or nonprofit credit counseling agencies.

Whether you have credit card debt, medical bills, payday loans, or personal loans, debt consolidation can help you reduce your interest rate, simplify repayment, lower monthly payments, and become debt-free faster.

Depending on your financial situation, there are other debt-relief options you may want to explore, such as debt settlement programs. This can be a good option for those with over $10,000 in unsecured debt, late fees, and with accounts in default status. With debt settlement, you can make a lump-sum payment lower than your total outstanding debt to settle your account.