Debt Relief for Personal Loans

Struggling to keep up with your personal loan payments? If your monthly bills are starting to cut into essentials like rent, groceries, or healthcare, you’re not alone. Debt relief may help make your payments more manageable.

This guide explains how personal loan debt relief works, who may qualify, and how it compares to other options, so you can move forward with confidence.

What Loans are Eligible for Personal Loan Debt Relief?

Only unsecured personal loans are eligible for debt relief. An unsecured loan doesn’t have a collateral asset tied to it (like a car or a home). People often use unsecured personal loans for debt consolidation, emergency expenses, medical bills, or larger planned costs like home improvements.

Unsecured vs. Secured Personal Loans

Unsecured personal loans that may qualify include:

Installment loans with no collateral
Personal loans used to consolidate debt
Personal loans covering a major expense

Secured loans that generally do not qualify for debt relief include:

Auto loans
Mortgages or home equity loans
Any loan secured by property or assets

Debt relief usually isn’t a fit for secured loans because the lender can recover the collateral if you stop making payments. With unsecured debt, there’s no collateral to take, so lenders may be more open to negotiating (sometimes through a settlement) to resolve at least part of what’s owed.

See if You Qualify

Speak to a Certified Debt Specialist to see if your debt qualifies.

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Debt Relief for Financial Hardship

You may consider debt relief if you’re dealing with real hardship. It can also help if you can’t realistically keep up with payments, even when you’re doing your best.

If, for example, you’re facing:

Job loss or reduced income
Medical bills or unexpected emergencies
A high debt-to-income ratio
Difficulty keeping up with monthly personal loan payments

You may benefit from learning how debt settlement works to see if it is a good fit for you.

Common Hardship Scenarios

If you're seeking personal loan hardship assistance, you’re probably dealing with circumstances beyond your control. These challenges often overlap with broader unsecured debt issues.

Common scenarios include:

Temporary or permanent income disruption
Medical or caregiving expenses
Accumulated unsecured debt across multiple accounts
Rising living costs that outpace income

If you have secured loans or if your financial challenges are short-term, alternatives such as debt consolidation loans or lender hardship programs may be more appropriate than debt relief.

Get Relief Now

Speak to a Certified Debt Specialist to explore your relief options.

Get Started

How Personal Loan Debt Relief Works

Personal loan debt relief helps you address unsecured loan balances that have become difficult to repay. Often, that means we negotiate with your lenders to reach an agreement so you can resolve the debt on new terms.

A typical personal loan debt relief process may include:

Reviewing unsecured personal loan balances and financial hardship
Determining whether negotiation-based relief is appropriate
Working toward reduced balances or adjusted repayment terms
Following a structured plan to resolve eligible debts

Debt relief is not the same as consolidation. Instead of swapping your loan for a new one, debt relief helps you negotiate the unsecured balance you already owe. Not sure which route fits your situation? Learn the key differences between debt consolidation and debt settlement.

Personal Loan Relief vs. Consolidation

Debt relief and consolidation serve different purposes. Debt consolidation replaces one or more debts with a new loan, often simplifying payments or lowering your interest rate. Personal loan debt relief focuses on unsecured debt you can’t realistically keep up with. The goal is to negotiate with lenders to reduce what you repay, making the debt easier to resolve.

Personal Loan Relief vs. Consolidation: Key Differences

Option	Debt Relief (Unsecured Loans)	Consolidation / Refinancing
How It Works	Modifies or resolves the terms of your existing debt	Replaces debt with a new loan
Requires Good Credit?	No	Often yes
May Reduce Total Balance?	Yes, in some cases	No
May Lower Monthly Payment?	Yes	Yes
Credit Impact	Possible negative impact	Depends on credit profile
Best For	Financial hardship situations	Stable income and credit

Consolidation may be a better fit if you:

Have a steady income and can keep up with your payments
Qualify for a debt consolidation loan (fair to good credit, or a co-signer)
Want to simplify multiple balances into one fixed payment with a lower interest rate

Debt relief may be more appropriate if you:

Can’t realistically keep up with your payments right now
Are facing financial hardship and don’t see a path to paying off what you owe
Need a path that doesn't rely on qualifying for a debt consolidation loan

You may find it helpful to compare relief with debt consolidation loans and review the pros and cons of debt consolidation before deciding which path fits your situation best.

Best Personal Loan Relief Options

The best option depends on the type of loan, your financial situation, and your long-term goals.

Options may include:

Debt settlement programs for unsecured personal loans
Lender hardship assistance programs
Credit counseling
Debt consolidation for qualifying borrowers

Work with ClearOne Advantage

At ClearOne Advantage, we specialize in helping you evaluate all of your debt relief options to choose the best fit for your situation. If you’re struggling to make payments on your personal loans, speak to a Certified Debt Specialist today to get a free savings estimate.

FAQs

You may be able to get debt relief for a personal loan if the loan is unsecured and you are experiencing financial hardship. Relief programs generally focus on unsecured debts rather than loans backed by collateral.

Secured personal loans typically do not qualify for debt relief because they are backed by collateral. If you have secured loans, you may need to explore refinancing or lender hardship options instead.

Personal loan debt relief can affect your credit score, especially in the short term. However, resolving unmanageable debt may be less damaging over time than continued missed payments or default.

Timelines vary depending on the number of accounts involved and individual circumstances. Some borrowers see progress within months, while others may take longer to complete the process. On average, a program graduate who makes all payments as agreed upon takes approximately 24–51 months to complete their plan.

No. Debt consolidation involves combining debts into a new loan, while debt relief focuses on resolving existing unsecured debt without replacing it with another loan.

Possibly. Refinancing replaces your current loan with a new one, often lowering the rate or monthly payment. It tends to work best if your credit and income qualify you for a better loan. If you can’t realistically keep up with payments right now, debt relief may be a better fit because it doesn’t depend on approval for new credit.

In some cases, negotiation-based programs like debt settlement may reduce the total amount owed on your personal loans. Results vary based on lender policies and individual circumstances.

Debt relief and bankruptcy serve different purposes. Bankruptcy is a legal option that wipes out your debts, giving you a fresh start. But if you’re looking for a less drastic option, debt settlement may help you resolve unsecured debt without going through the court system. In many cases, settlement has a smaller impact on your credit than bankruptcy and gives you more control over the process.

We encourage you to research how debt relief programs work and to be cautious of promises that sound too good to be true. Look for companies that have strong customer reviews, industry certifications like the Association for Consumer Debt Relief (ACDR), and BBB accreditation. The Federal Trade Commission provides guidance on choosing legitimate debt relief services and avoiding scams.

balances and unsecured personal loans. A Certified Debt Specialist can help you review your accounts and confirm what options fit your situation.

You can explore ClearOne Advantage’s debt relief guide, review FAQs, or learn more about how ClearOne Advantage works.