The Best Debt Consolidation in Ontario for Debt Relief

What is debt consolidation?

By choosing debt consolidation as a monetary relief solution, you can apply for a new loan to pay your debt. This will also allow you to “consolidate” everything. In this case, the repayments that you have been making each month for your debts may be merged into a single payment every month. This will merge your smaller loans. One of the main benefits of this debt-help alternative is that it will lower your interest rates. 

Where will you get this type of loan?

To consolidate debt in Ontario, you’ll need to be given access to financial institutions such as banks and finance companies. The money will be issued to you through your bank account or the finance agency will do the payout directly. 

What about the interest rates? How are they calculated?

The interest rates will depend on your credit score and the collateral that you can offer. This will prove how you can repay the loan. You need to build a good credit score and must have enough assets to show your creditors that you can return the money. Most of the time, your lenders will look at your high-value properties which can easily be sold, such as cars or estates. On the other hand, you will not need to provide collateral if your credit rating is sufficient. The interest rate will be based on these factors—high credit score and good collaterals mean a much-lowered interest rate. 

The Advantages of Credit Consolidation Ontario

You only need to make payments once every month. As smaller debts are consolidated, you do not have to worry about making multiple payments monthly. Moreover, you only have to deal with one creditor (where you got the consolidation loan) and forget about your other lenders. 

Lowered interest rates mean lesser monthly repayments. Your interest rates will be adjusted, along with the total amount of payments each month. In this case, your monthly bills will be less than what you were previously paying. 

You can be debt-free in a few years. A debt consolidation loan may enable you to complete repayments within 2 to 5 years. 

In summary, this particular option can become your best solution to be debt-free if you know how to take advantage of it. How will you know that this is the best option for you?

Debt consolidation loans in Ontario are not for everyone. Here are some of the reasons why: 

• Applying for a consolidation loan can be difficult. Your creditor will review your situation thoroughly. You will be assessed if you have the qualifications. For instance, there is a lesser chance of getting a loan if you are unemployed, self-employed, and have a low credit score. Your lender will check if you have a steady source of income. 
• In case you are not deemed qualified for the loan, your lender will ask for a co-signer. This will result in additional problems in the future, as creditors will go after your co-signer (who can be a family or friend) if you fail to make payments. 

• You will be at risk of losing your assets. If you have placed your house as collateral, it may be taken from you and sold as payment. 
• Applying for a consolidation loan means you will not have a chance to use your credit cards or apply for an additional loan. 
• This will reflect on your credit history. Other creditors may do a credit inquiry if you applied for a mortgage or auto loan. This will decrease your chances of approval. 

From the points mentioned above, you need to think several times if a debt consolidation loan is appropriate for your situation. People who are already in a stressful financial situation will find it hard to comprehend alternative options for debt relief in Ontario. 

Debt Consolidation Loans Ontario: Getting the Right Deal

You will be given several options under a consolidation loan. Each type has its benefits.

Credit Card Consolidation or Balance Transfer

If your major problem is credit card debt, it is beneficial to get a credit card consolidation loan. You can shift all of your credit card balances into another loan with a 0% or lowered interest rate within a period of 6 to 18 months. 

Debt Consolidation Through Finance Companies

You can apply for a loan in a bank or finance company if your credit score is good and you can offer high-value collateral. You may need to look for companies that offer low interest rates. Make sure to do proper research before finalizing your application.

Apply for a Line of Credit

This is also applicable when you have a good standing in your credit rating. Most banks will offer a line of credit connected to your existing account, which can be used to consolidate debt.

Debt Settlement Program

Going for debt settlement in Canada entails you have run out of choices, luckily, you can still opt for a debt repayment program or a consumer proposal. If you qualify, generally with a consumer proposal you only pay back a portion of the money owed, typically a reduction of 50% to 70% which is a great advantage over a traditional consolidation loan.  This will also enable you to make affordable and easy monthly payments. 

Get Help from a Licensed Insolvency Trustee

There are lots of ways to get out of your financial problems. The best thing to do is to approach a Licensed Insolvency Trustee. Remember that it is important to comprehend your financial situation. A Trustee can assist you in doing so and will help you become financially independent so that you can avoid debt problems in the future. You can contact Richard Killen and Associates to understand better about the best debt consolidation in Ontario to eliminate your financial issues.