Toronto Debt Consolidation Help : How to Get out of Debt in Toronto, ON
Are you looking for Toronto debt consolidation help?
Do you want to learn more about the process and how it can transform your finances?
In this post, we’ll look at what debt consolidation in Toronto is, what it constitutes, and the types of eligible loans that are popular and lucrative.
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What Is A Consolidation Loan?
A consolidation loan is when you have multiple arrears and combine them into one, manageable loan.
Taking out small amounts of money means you will need lots of them to cover your expenses.
As a result, it’s easy to pay too much in interest, as well as fret about meeting strict and tight deadlines.
A consolidation agreement merges your overdue balances so that there is no need to fret about handling several arrears at once.
By paying a single amount each month, you can make your debts more manageable while reducing the costs.
Advantages Of A Consolidation Loan
Understanding the specifics is critical if you’re in a position where you require a consolidation agreement.
So, how does a Consolidation Loan differ from the payment plans that you have now?
Here are the advantages that make them incredibly lucrative.
Lower Interest Rates
As a rule, you will be charged between 20% and 30% for overdue credit balances.
This is a significant debt to accrue every month because you couldn’t afford to pay your bills on time.
With a consolidation loan, the typical interest rate is below 10%.
That’s a potential extra 10% to 20% in savings, and all it takes is for you to restructure your arrears.
This can take the form of credit card or mortgage consolidation, yet the rate will remain the same.
You Can Borrow More
Of course, to merge several debts into one, you need a considerable amount of money.
Thankfully, consolidation loans are available in sums of $20,000, depending on your circumstances.
For a remortgage loan, for instance, your mortgage must be registered to get the best terms.
Still, the options are varied, and the conditions are very flexible.
Therefore, the latter means there is less chance of making the same mistakes and ruining your finances.
It Boosts Your Credit Score
When you rack up debts and don’t pay, you put your future in jeopardy.
The reason why is straightforward – non-payments hurt your credit score.
So, leaving your unsecured loans untouched in the hope they disappear will only prevent you from borrowing money again.
Although it may not sound like a disaster, an unforeseen circumstance (COVID-19; Housing Crisis) could make you homeless.
After all, it’s structured to meet the demands regularly and on time, two aspects rating companies use to determine credit scores.
You Get Expert Assistance
Applying for a credit card couldn’t be simpler.
Fill out an online application and the plastic will be in the mail within hours.
Even if you’re rejected for the one you want, the card company may offer you an alternative that you’re guaranteed to get because you’ve been pre-approved.
Eliminating your arrears, however, is challenging.
If you’re tired of trying to deal with your debts on your own, you can use consolidation loan professionals to your advantage.
They’ll do the hard work, and all you need to do is to sign on the dotted line.
Will My Application Be Accepted?
Consolidation loans are typically accepted for various reasons, the main ones being that creditors want to recoup a percentage of their losses.
And, as they buy debts at low rates, they don’t need as much money to break even and make a profit.
Still, there are criteria you must hit:
- LTV Ratio: LTV stands for ‘Loan to Value’ ratio, and it refers to the value of mortgages on the property divided by the property’s estimated selling price. Private lenders won’t consolidate your arrears if your LTV is over 80%. It’s 75% for rental properties.
- Credit Scores: Traditional creditors, such as banks and credit card companies, need applicants to possess a 550 or higher credit rating. Those who don’t are deemed a risk and their application will be rejected. For those with a low credit score, a debt consolidation agreement in Toronto with an institutionalized lender may not be an option.
Private lenders don’t care whether your credit is bruised and battered, or your credit cards maxed out because they aren’t held to the same rules.
There are several types of consolidation loans on the table, but the one worth serious consideration is a Consumer Proposal.
What makes a Consumer Proposal an excellent tool for those whose debts are out of control is the terms.
If your balances equal $250,000 or less, you can boost your credit score while retaining your assets and erasing unsecured debts.
Plus, the way the plan is structured makes them unlikely to be rejected.
You only need a simple majority of creditors to agree to the proposal for it to be recognized by the courts.
Even then, the debtor who’s owed a higher percentage of credit gets a bigger say.
So, as long as they are on board, you should be able to merge your debts.
People who stick to their responsibilities will receive a certificate of discharge after five years or sixty months and their arrears will cease to exist.
At Bankruptcy Canada, we understand that life goes by quickly.
All it takes is one mistake to spiral out of control and put your future in doubt.
That’s why we’ve helped over 100,000 Canadians with Toronto debt consolidation advice.
The way it works couldn’t be easier – head to the website and use it to find a qualified trustee in your area.
Our consultation isn’t only free, but there is also no obligation to accept the plan put forward.
You can merely use it as a way to weigh up your options by receiving expert advice from knowledgeable and experienced experts.
If that sounds like something you need, please don’t hesitate to contact us.