This approach uses only free software!
We will route the sound (digitally) through a Digital Audio Workstation (DAW), and insert audio plugins, call Audio Units, into the sound path. For the DAW, we use GarageBand, which is free from Apple. The downside? GarageBand uses a lot of RAM. If you have 16GB of RAM, you likely will not feel it. If you have 8GB of RAM, you might want to watch the Memory tab of Activity Monitor to see if you have enough RAM.
The only software you will need is BlackHole. Just download it, unzip it (double-click in it), and install it, then come back here to configure GarageBand.
There you have it. It should be working now if you have set your sound output to BlackHole.