A debt Consolidation Loan is a financial tool that helps you pay off multiple debts and combine them into one easy-to-manage payment. It can be a good idea, especially if you’re paying high interest rates on your credit card balances. However, it’s important to weigh all the pros and cons before you make a decision.
Debt relief has become a common strategy for Canadians to reduce their financial burden. In fact, a recent Finder survey found that many Canadians are opting for debt consolidation and consumer proposals over declaring bankruptcy.
It’s important to note that debts that aren’t owed to an actual creditor cannot be paid with a debt consolidation loan. This includes payday loans, unsecured personal loans and prepaid cards. If you’re unsure whether your debts can be paid off with a debt consolidation loan, check with the lender or your financial institution.
The Ultimate Guide to Debt Consolidation in the Great White North
Getting a debt consolidation loan in Canada is possible for people with fair to good credit. However, you may need to pay a higher interest rate than if you had good or excellent credit. It’s also important to shop around to find the best deal. You can try online lending marketplaces like Lendful, which matches borrowers with lenders who offer competitive unsecured debt consolidation loans in Canada.
Another option for consolidating debt in Canada is to work with a non-profit credit counseling organization. These organizations will help you create a budget and debt management plan that works with your unique financial situation. They’ll also negotiate with creditors on your behalf to bring down interest rates.