Juggling multiple debts can be a headache, especially when interest rates are high. If you are paying more in interest charges than your debt is worth, a debt consolidation loan may make financial sense for you. A debt consolidation loan allows you to roll your existing credit card and other debt balances into a single consolidated debt, typically at a lower interest rate than what you are currently paying. By cutting your interest rate by just one percent, you can save thousands over the course of a typical loan term. Resource:alpinecredits.ca
A debt consolidation loan is only one of several debt relief solutions available in Canada, including credit counseling, debt management plans, and consumer proposals. It is important to review your options and choose the solution that is best suited for your unique financial situation.
Finding a Debt Consolidation Loan
If you are thinking of taking out a debt consolidation loan, you should first compare lenders and their rates, fees, credit score requirements, and loan terms. It is also important to ensure that you will be able to meet the monthly payment obligations of your new debt consolidation loan. You will need a good income and an excellent credit score to qualify for the most competitive rates.
If you have fair or bad credit, look for lenders that specialize in loans for borrowers with this type of credit. You should also focus on obtaining the shortest loan term possible, as longer loans will result in you paying more in interest charges over time.