Bad Credit Loans In Toronto and Debt Consolidation Loans

Bad credit loans in Toronto go hand in hand with debt consolidation loans and unsecured loans as debt relief options for individuals who have struggled in getting ordinary loans to get out of a major debt problem. One solution is taking on a debt consolidation loan. This is also applicable for those who have a bad credit score. You are taking your debt from unsecured loans such as credit cards, and other high-interest debts and combining them into one and a single monthly payment that is usually at a substantially lower interest rate.

A debt consolidation loan is typically getting a new loan to pay your debt with payment terms which are usually directed to your advantage. This can be an effective strategy depending on the nature of your financial situation as well as your attitude in resolving your problem.

A scenario could look like this.

Pre- consolidation Monthly Payments.
Description         Minimum Monthly Payment          Interest Rate
Credit Card 1      $500                                                   28%
Credit Card 2      $400                                                   21%
Credit Card 2      $300                                                   19%
Total                     $1,200

New Debt Consolidation Loan Example
Description         Monthly Payment             Interest Rate
Loan                     $700                                                   8%

As you can see in the above example, the interest rate is substantially lower as are the monthly payments. This may all look good, but what is not shown above is the amortization period. While the interest rate is lower, if the amortization period is over a long period of time, the benefit is not as clear cut. The whole idea in this scenario is to pay off your debt as quickly as possible.

The above also represents a debtor that has a good credit record. If you have been turned down for loans previously, the rate you will pay could be substantially higher. Many people that are turned down on their debt consolidation loan consider bankruptcy or a consumer proposal as an alternative. This is especially common if an individual is turned down a few times by more than one institution.

Bad Credit Loans Toronto

Your monthly expenses exceed your income and you are sinking further into debt with each passing month. What do you do? Who do you call?

Calling a trustee in bankruptcy Toronto is probably not on the top of everyone’s list that has gotten themselves into financial trouble, but it should be. Moneylenders, banks and other loan companies make their money on loaning you money and the interest you will pay them. Their big concern is whether you are a good risk to pay back the loan with interest.

On the other hand, a trustee is unbiased and will give you the straight goods. After reviewing your financials, they can advise you on the likelihood of you being approved for a consolidation loan and at what interest rate. They will also go over other options such as a consumer proposal or possibly bankruptcy if it makes good financial sense for you.

Talking to a bankruptcy trustee Toronto does not mean you are obligated to declare bankruptcy. If fact after your consultation, you may choose any number of options to pursue or none at all.

Your initial consultation is free and we also offer after hours consultations. I invite you to call our Toronto office at 1 (888) 545-5365 to find out what your options are. It will likely be one of the most stress relieving calls you will make. Our Toronto location is just south of the 401 on the west side of Islington. Our address is Richard Killen & Associates 2150 Islington Avenue, Suite 202, Toronto ON M9P 3V4 to receive more information on Toronto Debt Consolidation Loans.

Bad credit loans in Toronto and consolidation loans are usually a sign of trouble and many times are just delaying dealing with the problem so do yourself a favour and discuss your options with a trustee first.