A debt consolidation loan is when someone borrows money and then uses that money to pay off other debts.
You may want to apply for a consolidation loan if you’re struggling to make your minimum monthly payments on your credit cards, line of credit or overdraft.
This means that you would take out a loan that would pay all of your existing accounts.
Debt consolidation has many benefits: Your first step is to apply to your bank or financial institution to see if you qualify for a consolidation loan.
When determining if you qualify for a debt consolidation the bank will look at your credit score, your debt service ratio and your employment status.
With this option, you only make one reduced payment per month.
By lowering your monthly payment and consolidating multiple payments into one, you are more likely to make every payment on time and in full.
When an individual owes debt to a lot of different lenders or accounts it is difficult to keep on top of the monthly payments.
Debt consolidation is a way to consolidate debt into one consolidation loan.
Now instead of having five different debt payments each month, you only have one payment.”Before deciding if debt consolidation is a good option to help you reduce your debts you need to determine if you qualify for a debt consolidation loan and are there enough benefits.
Consolidation loans in Canada are available at banks, credit unions and finance companies.
If you’re stressed and having trouble paying your debts, get help sooner than later.
You’ll not only have more options and solutions available to you, it will ease your stress and you may even sleep better (we find this is true with more than 60% of the people that we help).
This will improve your credit score, giving you greater options with lenders in the future.