Debt Consolidation
If you’re tired of juggling debt payments, a debt consolidation loan can take the guesswork out of paying bills on time and may make budgeting for repayment easier. With debt consolidation, all of your debts are combined into one overall loan provided by your bank or financial institution.
If you are approved for a debt consolidation loan, the financial institution will provide you the funds to pay your creditors. You will then pay the financial institution one monthly payment, generally at a lower interest rate than your credit card debt. Keep in mind you must first qualify for this type of loan. A financial institution will sometimes require you to have a co-signer or someone to guarantee your loan, which may be your biggest obstacle in obtaining a consolidation loan.
A second mortgage is a type of debt consolidation loan. If you have equity in your home, you may be able to refinance your current mortgage or obtain a second mortgage to consolidate all of your debts into one monthly payment with a lower borrowing cost.
A debt consolidation loan may be a good choice if:
- You have a decent credit score to obtain the loan
- Have someone available to co-sign your loan if required
- Your monthly budget allows you to make the monthly consolidation loan payment
If you don’t have a strong credit rating or would be unable to keep up with your consolidated loan payment, it’s time to look at other options. Speak with one of our local Licensed Insolvency Trustees to determine whether a debt consolidation loan or perhaps a Consumer Proposal is the answer for your debt challenges.
Life-Changing Debt Solutions is about finding the best choice that will work for you.
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2021-04-08
More than half (54%) of Ontarians within $200 of financial insolvency; up 13 points since December, reaching a five-year high
MNP Consumer Debt Index
More than half (54%) say they are $200 or less from not being able to cover their monthly bills and debt obligations, a whopping 13-point jump from December. Compared to the other provinces, Ontarians are the most likely (32%, +10pts) to report they are already insolvent with no money left to cover their payments at month-end.
