Free Debt Management Program in India: What Exists

We found no single government-run “free debt management program” in India. There’s no one office, scheme or helpline that takes your loans, plans them and handles them for nothing. The phrase is a search term, and it covers several separate things, each with its own limits.

So when a page or an ad says “free”, it helps to ask what kind of free it means. Here are three honest meanings:

• Free to join. A financial literacy camp is a good example. You turn up, you learn, and nobody charges you.

• Free to use. Filing a complaint with the RBI Ombudsman is one. There’s no fee to file it, and none to have it looked at.

• Free first step, with fees later. This is the one to read carefully. A first call costs nothing, but the help that follows may not. We’ll show you how to spot it further down.

Most pages on this topic say “counselling is free” and stop there, with no source. That’s a risky thing to assume, so check each option’s terms yourself before you rely on it.

If you’re new to the idea of counselling itself, here’s how credit counselling works in India. It explains what a counsellor does, and what they can’t do.

This guide covers unsecured loans, cards and BNPL (buy now, pay later) plans. Secured loans, like home or car loans, follow different rules, so the steps here don’t apply to them.

You’ve probably noticed the gap by now. People search for one program, and what exists is a handful of pieces. So what free help actually exists?

A few different things get called free debt help in India. Here is what each one offers and what it costs:

CFL means Centre for Financial Literacy. FLC means Financial Literacy Centre. FLCC means Financial Literacy and Credit Counselling Centre. This is a general guide. Check each provider’s own page for current terms.

Here’s how to read the table:

• The last three need a check on the provider’s own site before you rely on them. Look for the cost, what the session covers, and what happens after it. We haven’t printed phone numbers, because they change. Use each provider’s own page.

• If any provider asks for money before help, stop and compare with this table. A fee isn’t always wrong, but it means the help isn’t the free kind listed above.

On the bank centres: in a circular dated 31 March 2011 (RBI/2010-11/456), RBI asked banks to set up Financial Literacy and Credit Counselling Centres. The circular doesn’t say the service is free, so we haven’t called it free. The same goes for the camps. RBI’s page says the camps are free of charge, but it doesn’t describe credit counselling.

For more on how camps and centres work, see our guide to financial literacy and credit counselling centres. And for one trust-run option in detail, here’s how Abhay credit counselling works.

So that’s what exists. Next question: what can these options actually do for your loans?

Free debt help is mostly guidance. It can help you see your situation clearly and point you in a direction. It doesn’t move your loans, and it doesn’t change what you owe. That’s a real limit, and it’s worth knowing before you spend time on it.

What free help can do:

• Go through your dues and your income. A good session shows you what you owe, what leaves your account each month, and what’s left.

• Explain your options. That might mean a payoff plan of your own, a talk with your bank, or a different route entirely.

• Point you to the right complaint route. If a bank has broken a rule, a counsellor can tell you where to take it.

What free help can’t do:

• Pay off or combine your loans. Combining needs a new loan, and advice alone doesn’t create one.

• Negotiate with your banks. A counsellor can suggest what to ask. They don’t sit across from your bank and settle on your behalf.

• Change the terms of a loan. Only the bank that gave you the loan can do that.

That’s the same limit RBI-linked counselling has everywhere. Here’s more on the limits of credit counselling.

Two providers in the table are worth a plain note. Abhay is described as helping you plan repayment, and it doesn’t negotiate settlements. Moneylife Foundation describes its service as one-time, early-stage guidance. It’s a good first conversation. It isn’t a plan that runs for months.

None of this is a reason to skip free help. For many people, a clear list and an honest second opinion is exactly what’s missing. Just don’t expect it to do the work of a loan, or of a negotiation.

If you want to know how counselling compares with settling, here’s credit counselling versus debt settlement.

Which brings up the practical question: in what order should you use the free options?

Some options in this guide are confirmed as free, while others require you to check the provider’s current terms before booking or using the service. The order matters, because each step makes the next one easier. Here are 7 steps:

1. Pull your free credit report from each bureau. You need the full list of dues, including small ones you’ve forgotten. Here’s how to get your free annual credit report.

2. Write every due on one page. Note what you owe, the EMI, the yearly rate and the due date. Any helper you speak to will ask for exactly this.

3. Check your EMI share of take-home pay. Add up your EMIs and divide by your take-home salary. If your EMIs take over half your pay, a plan alone may not be enough. If it’s well under half, a plan of your own may do the job.

4. Book a one-time guidance session. A non-profit or a bank counselling centre can do this. Ask about the cost before you start, and see our guide to debt counselling in India.

5. Attend a literacy camp if you want to learn the basics. It’s free of charge and local. You’ll come away knowing how interest, EMIs and credit reports work.

6. Keep a log of every call, letter and reference number. It’s your proof if you ever need to complain.

7. If a bank breaks a rule, complain through the Ombudsman route. The steps are in the section on complaints below.

Here’s an illustrative check for step 3. Say your EMIs are ₹18,000 a month, and your take-home pay is ₹32,000. Divide ₹18,000 by ₹32,000 and you get 0.5625, which is 56%.

That’s above half. It tells you a plan alone may not be enough, because over half your pay is already committed before rent, food or bills. This example is illustrative. Figures are for explanation only.

Notice what the steps do and don’t do. They give you the full picture and a plan. They don’t reduce the 56%. For that, you’d need a route that changes the loans themselves, which free guidance can’t do.

Why steps 1 to 3 come first. A counsellor, a bank or a company will all ask for the same three things: your dues, your EMIs and your income. If you walk in with them on one page, you save time, and you’re harder to mislead. It also helps you compare any two offers fairly.

Many “free” offers turn into costs once you’ve shared your details. The first call is free, and the payments start after. Here are 6 red flags to watch for:

• A fee before any help. Registration, token money, or “processing” charged before anyone has done anything.

• A request to pay into a personal account. A genuine company takes payment into a company account, and gives you a receipt.

• A claim that the program is “government-approved” with no notice number. If it’s real, there’s a notice or circular you can check.

• A promise to “clear your debt” or “stop all calls”. No one can promise either, and RBI’s rules, not a company, set what recovery agents can do.

• Pressure to decide today. A real option will still be there tomorrow.

• No written terms. If it isn’t in writing, you can’t hold anyone to it.

Here’s how it looks in real life. Say a “free” call ends with a ₹5,000 “registration fee” to a personal account, and no written terms. That’s a warning sign, not a free service. Once you’ve paid, you have no document, no receipt and no one to complain to. This example is illustrative.

Before you share documents or pay anything, ask any provider three questions:

1. What is free, exactly? Ask them to name the part that costs nothing.

2. What costs money, and when? Ask for the amount and the date it’s charged.

3. Is it all in writing? If they hesitate, that’s your answer.

For more, see how to choose a credit counselling agency, and how to evaluate debt counselling services.

We haven’t named any provider here. These checks work on anyone, including us.

Some debt help costs nothing, some doesn’t, and you need to know which is which before you start. The table below shows what each type of help charges, and what to watch for. It’s the part most “free help” pages leave out.

This is a general guide. Fees vary by provider. A Key Facts Statement (KFS) is the one-page summary of a loan’s cost that a bank must give you before you sign.

A few notes on reading it:

• The first row costs only your time. If something in that row asks for money, it isn’t the real thing.

• The consolidation row depends on the lender. The lending partner that gives the new loan may charge its own processing or foreclosure fee. That’s why the KFS matters. Ask for it, and read it before you sign.

• The settlement row has two charges. One is an evaluation fee, which is non-refundable. The other is a fee that’s success-based, so it depends on the outcome. Settlement may be considered when a borrower cannot repay the full outstanding amount and the lender is willing to accept a negotiated amount. It can have serious credit-reporting consequences, so borrowers should understand the alternatives and written terms before proceeding. FREED’s Loan Settlement Plan is one such route.

• Private “management” plans often charge every month. A small monthly fee over several years can add up to a large figure. Ask for the total over the full term.

Whatever you choose, ask for fees in writing before you share documents. Share your Aadhaar, PAN or bank statements only after you’ve seen the terms. It’s easy to do, and it protects you from most of the problems in the last section.

For the basics, here’s what debt management is. And if a bank itself breaks a rule, there’s a route for that too.

Say a bank has charged you something you weren’t told about. Or a recovery agent keeps calling in a way that feels unfair. You can complain, and under RBI’s Integrated Ombudsman Scheme 2026 (RB-IOS 2026), it costs nothing to file. Here are the steps:

1. Write to the bank and note the reference number. Keep a copy of what you sent, and the date.

2. Escalate within the bank’s own levels. Most banks have a grievance team, and a level above it.

3. If there’s no reply in 30 days, or you’re unhappy with the reply, you can approach the RBI Ombudsman. The Ombudsman is RBI’s independent office for complaints about regulated banks and lenders.

4. File within 90 days of that deadline or of the bank’s last reply, whichever is later. Do it online at cms.rbi.org.in. The toll-free line, 14448, helps with questions and status.

Here’s how the dates work, with an illustration. You write to the bank on 3 November. There’s no reply by 3 December, which is 30 days. Your 90-day window then runs to 3 March (3 December to 3 January is 31 days, to 3 February is 62, and to 3 March is 90).

Now say the bank replies on 20 December, and you’re unhappy with the reply. The window runs from that reply instead, which takes it to 20 March. It’s whichever is later. Dates are illustrative. Check the current rules on RBI’s site before you file.

Three more facts are worth knowing. Filing costs nothing, and you don’t need a lawyer. Note the wording: a lawyer isn’t required, and you can still use one. You can file in person yourself, or through an authorised representative.

Be honest with yourself about what the Ombudsman does. It handles service deficiency, such as an undisclosed charge or a failure to follow a rule. It doesn’t overrule a bank’s commercial decision, such as why a loan was refused. And there’s no promise of how a complaint ends.

If your complaint is about a recovery agent, here’s where to file a complaint against a recovery agent in India.

If calls and messages have already started, you can still act. RBI’s 2022 directions set clear limits on how banks and their recovery agents may behave. Here’s what they say:

• No intimidation or harassment. An agent can ask for payment. They can’t frighten you into it.

• No threatening or anonymous calls. An agent must be identifiable.

• No calls before 8 am or after 7 pm. That holds for every day of the week.

• No inappropriate messages. That covers abusive texts, and messages that shame you in front of others.

• The bank stays responsible for its agents. If an agent breaks a rule, the bank answers for it.

Here’s what to do. Keep a written record of calls and messages, including dates, times, numbers and what was said. Preserve messages and other evidence. If you consider recording a call, do so only after checking the applicable privacy and legal requirements. Then complain to the bank’s grievance team, and note the reference number, because you’ll need it if you go further. Here’s the full RBI complaint process for recovery agent harassment.

How FREED Shield helps

If you are facing recovery agent harassment, FREED helps you understand your legal rights as a borrower, report inappropriate recovery practices, and raise complaints with your lender. Where harassment is frequent, our experts speak to recovery agents on your behalf. And if you receive a legal notice about your loan, FREED helps you understand your options and draft a suitable reply. FREED Shield is available to everyone, whether or not you’re on a FREED plan.

One honest note. Legitimate recovery calls continue until the dues are paid or settled. The rules stop harassment, not the bank’s right to ask for its money. A helper can reduce the pressure, but they can’t make the dues disappear.

A few small habits protect you more than any single program. Here are 6 that work whichever route you pick:

• Start with your credit report and a one-page list of dues. Everything else builds on these two things. Without them, every offer looks better than it is.

• Ask what is free and what costs money, in writing. If the answer is vague, treat it as no. A clear provider will write it down in a minute.

• Don’t share OTPs, passwords or card details with a helper. No genuine provider needs them for guidance. An OTP gives someone access to your money.

• Keep every letter, message and receipt. Put them in one folder, on paper and as scans. If there’s ever a dispute, this is your proof.

• Compare at least two options before paying anyone. Even a quick second look can show you a cheaper or clearer route.

• Check your EMI share before you pick a route. If your EMIs take over half your pay, a plan alone may not be enough. If it’s well under half, a plan of your own may do the job.

You don’t have to do all six on one day. Start with the first two, and add the rest as you go. If you only do the first two, you’re already ahead of most people who call a helper unprepared.

Free guidance can help you plan, but it doesn’t combine or settle loans. If your EMIs are too heavy for a plan alone, you need something that changes the loans themselves. FREED is India’s trusted loan management platform, and over 20 lakh people trust it. Here are the two ways it helps, consolidation first.

Loan Consolidation Plan (for people still paying their EMIs)

If most of your salary goes towards paying multiple EMIs, FREED’s Loan Consolidation Plan helps you combine multiple loans into a single monthly EMI. This can reduce your monthly EMI burden by up to 50%.*

Here’s how the Loan Consolidation Plan works:

1. FREED assesses your profile. It looks at your loans, income and repayment record.

2. FREED matches you to a lending partner. You don’t have to hunt for an offer yourself.

3. The partner disburses one new loan. That loan pays off your existing loans.

4. You’re left with one EMI. One amount, one date.

5. FREED handles the process end to end.

The lending partner’s own processing or foreclosure fees may apply, so read the Key Facts Statement before you accept.

Loan Settlement Plan (only for people who genuinely can’t repay)

If you genuinely cannot repay your loans, FREED negotiates with your lenders to settle them for less than 50%* of your outstanding dues. This is a different situation from the one above, and it isn’t where most people should start. Here’s how it works:

1. Assessment and a personalised plan. FREED looks at your loans and what you can afford to save.

2. You save a fixed monthly amount into an SPA. That’s a Special Purpose Account, held in your own name by an independent trustee.

3. FREED negotiates with each bank once enough is saved. The bank decides the terms.

4. No bank is paid until you authorise it.

5. You receive a settlement letter from the bank.

The first settlement typically comes within about 4 months, and the full programme typically takes around 1.5 years. Fees are success-based, and the evaluation fee is non-refundable. Over 33,000 accounts have been settled through FREED, with ₹500 Cr+ in settlement amount.

FREED handles unsecured loans only: personal loans, credit cards, BNPL and app loans.

*Rates and ranges shown are indicative. Final terms decided by the bank. FREED is not a Loan Provider. No outcome is guaranteed. Please verify directly with your bank.