Debt Consolidation Canada - Consolidating Your Debts
Learn How You Can Consolidate Your Debts
What is Debt Consolidation in Canada?
A debt consolidation program is a service that allows you to combine two or more debts into 1 debt.
Often the debts being consolidated will have a high interest rate, while the consolidation loan will offer a lower interest rate so you can save money on interest.
Generally, this means you can get faster debt relief.
Another benefit of debt consolidation in Canada, is you only have 1 monthly payment to keep track of.
Debt Consolidation is a Simple Debt Management Plan
Consolidating your debts allows you to consolidate your unsecured debts including credit cards, lines of credit, and payday loans into 1 easier to manage loan.
It is a simple way to receive debt relief, but it carries many benefits such as:
- You will only have one lower monthly payment,
- Interest rates are usually lower on a debt consolidation program,
- Collection calls will end,
- You can keep your credit cards in many cases,
- Your credit counsellor will negotiate with your creditors on your behalf.
Debt consolidation is an easy way to manage your finances by combining multiple bills and debts into a single, low interest monthly payment.
By consolidating your debts you cann pay off your debt because you will only have 1 bill to worry about, and you are often able to get out of debt faster, all while paying less monthly.
The most popular and easiest way to consolidate your debts is through a debt consolidation loan.
What is a Debt Consolidation Loan?
A debt consolidation loan is a type of unsecured personal loan that is used to consolidate your existing unsecured debts into 1 loan payment.
As a consolidation loan is unsecured, you only need a good credit score to qualify.
How Does a Debt Consolidation Loan Work?
When you apply for a debt consolidation loan you will be receiving a personal loan in the amount that will cover all of your existing debts you wish to consolidate.
Your lender will approve the loan based on your credit score and you will take the money you get to pay off your existing debts, such as your credit card bills.
When you combine all of your debts into a debt consolidation loan, you only have to worry about making the payment on the consolidation loan.
Usually the debt consolidation loan has a lower interest rate, so you can pay off your debt quickly and efficiently.
Can I Consolidate All of my Debts?
You cannot consolidate secured debts, such as a mortgage or car loan, but you can use a debt consolidation loan to pay off your unsecured debts such as:
- Retail store cards,
- Credit card bills,
- Unsecured personal loans,
- Unsecured Lines of credit,
- Utilities debt,
- Tax debt,
- Child or marriage support arrears.
What Are The Advantages of Debt Consolidation Loans?
There are several benefits of consolidating your debt through a consolidation loan.
Lower Interest Rates
When you get a debt consolidation loan, you will often get a much lower interest rate.
This will save you money on monthly interest charges, and help you get out of debt faster.
One Monthly Payment to Keep Track Off
When you are juggling many different bills, all with different due dates for the payments, it can become a big chore.
If you are juggling many bills and loan repayments, it makes it much easier for a payment to get missed.
With a consolidation loan you only have to worry about 1 payment due date.
Lower Your Monthly Payment
A debt consolidation loan often lowers your monthly payment, because you will have a lower interest rate on the loan.
You can use the extra money as you see fit, or you can use it to pay down your principal loan even quicker, and get out of debt sooner.
Less Creditor Pressure
If you are dealing with many different debts, it can become easy to miss minimum payment due dates.
When you miss payments it can damage your credit, and your creditors can start calling to get paid.
If you pay off all your existing debts, you can reduce your financial stress and the harassing collection calls will end.
Helps Your Credit Score
When you pay off all of y our debts in full, it will reflect on your credit score.
You can also avoid missed payments and the damage it causes to your credit report.
Of course, you must make all the payments on your new consolidation loan on time to see the positive impacts on your credit score.
We Offer Friendly Advice and Guidance
When you are faced with an overwhelming debt problem, understanding your debt relief options can be confusing.
You don't have to worry, because our Licensed Insolvency Trustees are here to help you get out of debt.
We take the time to understand your concerns and the source of your debt problems so we can provide the right solution for you.
We will carefully review your situation to determine if a consumer proposal can help you get out of debt.
If a consumer proposal is the right way forward for your situation, we will help you make up a consumer proposal that will work for your budget and will be attractive to your creditors.
Consumer proposals can help you ease your debt worries and move on to a fresh financial start.
All of the Licensed Insolvency Trustees of Bankruptcy Canada are members of CAIRP (Canadian Association of Insolvency and Restrucuring Professionals).
CAIRP is the governing body that advocates for the insolvency (bankruptcy and consumer proposal) process in Canada.