Should I Consolidate My Debt?
In Canada, the widely known debt relief approach is Debt Consolidation. It is either vocal to individuals to consider consolidation loans or either suggested by a credit counselling company as a component of debt repayment strategy or plan. The reason why debt consolidation is deemed to be known by all is that its process is easy to comprehend and can save you huge money.
Reasons for Consolidating Debts
There are several reasons why people openly consider consolidating debts, and these reasons are as follows:
You might not need an intense debt relief approach if you can still manage to pay the required minimum payments of your debts each month. If you consolidate your debts, you can get much lower minimum payments every month that can help you save money for the payment of your debt principal. This way, you can get rid of your debt faster than you expect.
With debt consolidation, you can organize your payments. This is because you will only be paying a single payment each month when you consolidate your debt. If you are paying several debts each month, it would be inconvenient on your part; hence, debt consolidation will make it easier and more convenient. You can also keep track of your payments easily and avoid missing your monthly obligation.
Moreover, you can abstain from payments when paying a bunch of consumer debts. This can result in penalty fees, additional charges in your interest, and a snowball effect. All these can result in a pile of debt that can trigger you to file for personal bankruptcy. To conclude, if you prefer a more organized and systematic means to settle your debts, you should consider debt consolidation.
Each debt relief programs are unique. Each is designed according to what the situation calls for it. For instance, a consumer proposal is designed for those who prefer to keep their assets and avoid bankruptcy. However, how a consumer proposal impacts your credit report is also significant as it can remain for several years.
In contrast, debt consolidation does not harm your credit, unlike a consumer proposal or bankruptcy. Though there may be a minor effect on your credit upon application, you can restore your credit as you make up to date payments on your consolidated loan. Furthermore, it can even improve your credit rating as you regularly pay your obligation on time.
Bankruptcy as a debt relief option should only be your last resort. This is because bankruptcy will oblige you to give in your assets. Besides, you must need to know what happens to your debt when you file for bankruptcy in Canada and how much will it cost you to file for bankruptcy.
With debt consolidation, you can avoid the causes of filing bankruptcy by making your monthly payments more affordable. As you consolidated your debts before it gets inevitable, it will be more feasible for you to cope up with the payments over time.
Is Debt Consolidation your best option?
To learn more about whether debt consolidation will serve you the best, simply fill out the FORM on this page and get the help that you need today.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.