Best Debt Consolidation Loans in Canada for 2021
If you have recently indulged in a loan or faced impending debts and due bills, you may have been considering several options to aid you in your financial problems. One such option, which is simple and reliable, happens to be debt consolidation. An easy and proficient process that allows you to pay off all your debts and due bills with ease.
What is Debt Consolidation and How Does It Help?
Some people might shy away from the idea of obtaining a new loan while facing due payments and various debts. But, contrary to popular belief, debt consolidation can severely help you return all of the money in a timely and organized manner.
The procedure of its workings is very simple. Debt consolidation is where someone can combine more than one debt obligation into a new loan with terms that you agree upon like lower tenure, interest rate structure, and various other factors. Via the amount received from this new loan, you can pay back any debts, due bills or other small loan payments that are due. By paying off small loans and debts in one go you not only save finances and interest but also finance the cost of the smaller loans you need to pay off.
Debt Consolidation in Canada
Furthermore, the borrower will have to only make one payment rather than the normal small payments to various other creditors. Debt consolidation in Canada is not limited to loans tied to an asset and can be used for a loan that is not connected to any ulterior assets. Things like an amount due for a credit card, your or your child’s educational loan, or even a house loan fall under debt consolidation and are unsecured loans which can be paid back by your new loan.
How Do You Get a Debt Consolidation?
There are a few steps and criteria a borrower is obligated to follow to obtain a debt consolidation. Firstly you need to identify the total amount of money you owe each lender, the obligations of your debts, and the time span or tenure in place. After you have gathered this information you will then have to apply for a consolidation loan which you can use to pay off your various, or single, debt.
If you do not understand the concept or structure, you can simply reach out to the debt consolidation company and question them about the details. The company you choose for your debt consolidation is an essential choice. This simple step can affect every factor of your consolidation loan, whether it be the monthly amount you will pay or the interest rate for the new loan. While debt consolidation aids consumers by allowing them to pay off minor loans in one go by using one major loan, it is also important to ensure that you agree to all of the conditions set. If the debt consolidation company sets a monthly instalment too hefty for you, or if they extend the loan for a long period of time and increase interest, then you will be stuck in a sticky situation with no way out.
Consolidate using a Line of Credit or Overdraft
Before the recession hit, it seemed as though banks were giving out lines of credit for $5,000 to $20,000 to almost everyone they could. Now that the global economy has changed, a line of credit may be much harder to qualify for. You can check with your bank or credit union to see what their criteria are. Usually, they want you to have a very good credit score, a good income and hopefully a good, positive net worth (but this isn't always necessary).
Lines of credit and overdrafts can be secured or unsecured. It depends on your situation and the bank's lending policy at the time (lending policy changes from time to time depending on the perceived health of the economy).
A line of credit and an overdraft are essentially the same things. They both turn your bank card (debit card) into a credit card so you can spend money you don't have up to a predetermined limit. Just like a credit card, you only have to make a minimum payment each month.
Consolidate by using your Credit Cards
If you can't find a debt consolidation company who will provide you with a reasonable debt consolidation loan you could try to consolidate all of your credit card balances onto one low-interest rate card and then aggressively pay off this card by paying a set amount each month that you determine in advance. For example, the minimum payment on the card could be $50, but if you choose to pay $500 every month, you will have the balance paid off in a reasonable amount of time.
From time to time credit cards offer very low promotional interest rates. Some people use these as an opportunity to consolidate their debts. This may work for a while, but the reason why credit cards offer these promotional rates is that most people don't pay off their balances in a timely fashion and end up getting stuck at a higher interest rate when the promotional interest rate expires.
Many credit card companies also offer low-interest rate credit cards if you can qualify for one. However, many times people who desperately want them don't qualify because their credit score is not high enough or they have too much debt. If this is your situation there are other options below that may work for you.
More information:
Visit: https://www.freedomcapital.com/
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#104 15272 Croydon Drive, Surrey. BC V3Z 0Z5
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