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Debt Consolidation in Canada

Debt consolidation loan is when an individual borrows a new loan at lower interest rate and then uses it to pay off their other loans, bills or debts with high interest rates. If you are struggling to make ends meet, applying for a debt consolidation loan in Canada via Loans Geeks will help you combine multiple debt payments into a single monthly payment. It will not only allow you to manage your debts properly, but will also enable you to save on interest charges. A debt consolidation is more of a personal loan that people borrow to consolidate all the unsecured loans like a credit card, overdraft, lines of credit, car loan and more.  But, remember that not all debts can be combined in a consolidation loan in Canada (one such debt is mortgage).

When you apply for a debt consolidation loan in Canada via Loans Geeks, we will match you against top-rated loan lenders available in your region, with most competitive interest rates to choose from.

Why People Choose Debt Consolidation Loan?

There are many reasons as to why people choose debt consolidation loans in Canada; here are some of the reasons:

  1. It helps in simplifying the finance. When you have multiple debts to pay off it is hard to keep a track of your cash flow. Single monthly payments makes the monitoring of finances easier.
  2. When the interest rate is reduced, people can save a lot of money. This means that they pay off debts with a high interest rate with a debt consolidation loan that generally has a low rate of interest.
  3. When you have to pay a small amount every month, it will not put a strain on your financial capabilities. With debt consolidation loan, you will either have a lower rate of interest or higher amortization period to pay off the loan.
  4. With debt consolidation loan in Canada, people pay off their debts faster. However, it is only true when you get a lower rate of interest and your monthly payment is the same.

Who is eligible for debt consolidation in Canada?

Debt consolidation in Canada is offered by banks, financial companies, and credit unions. You have an option to get either secured consolidation loan or an unsecured one. When you apply for a debt consolidation loan via Loans Geeks, you will be matched with up to five top-rated loan lenders in Canada, who have most competitive offers for your particular financial situation.

If you opt for a debt consolidation from traditional financial institutions, such as banks, required criteria so you can qualify for a debt consolidation loan are typically very strict.

  • You will need to have a very good credit score. If you are significantly behind on your debt payments, you are likely to be rejected for the loan. Or you will be offered such a high interest rate that you are better off looking elsewhere.
  • You will need to have a reliable security as a collateral. When you apply for debt consolidation loan in Canada banks, you typically need to have an asset worth the amount of loan as a security. Debt consolidation loans like second mortgage or home equity credit line generally carry lower rates of interest as compared to unsecured debt consolidation loan.
  • Bear in mind that not all debts can be included in debt consolidation. When you take a debt consolidation loan in Canada to pay off your other debt, you should note that you cannot pay off every debt with this loan. Secured loans such as car loans and mortgage loans are not included in this type of loan.

Benefits of Debt Consolidation Loan in Canada

–    You can get lower monthly payments that you can afford

–    Consolidated debt in Canada can be paid off much faster as it typically has lower interest rate.

–    All the creditors are paid promptly reducing any damage to your credit rating

–    You will remain with a single monthly payment, making it easier to get control over your finances over time

–    By following the terms of the consolidation loan, your credit score will not be negatively affected

–    You will avoid bankruptcy, which would limit your financial future

Disadvantages of Consolidating Debts in Canada

–    While taking a debt consolidation loan can help you save money, you will still have a combined debt that needs to be paid off. If you are not careful and still continue using your credit accounts, you might get tempted to use them, which would increase your future debts too.

–    Financial institutions offering debt consolidation loan may not be as flexible as the creditors, and they need to ensure that their payments are being submitted on time. You need to be sure that this option is the best for you when taking a debt consolidation loan in Canada.

Debt Consolidation Tips

When you use Loans Geeks to check your debt consolidation options, we will present you with the selection of up to five top-rated loan lenders in Canada, that best match to your specific financial situation and the region where you live.

However, there are several things you should do on your own before making a decision to secure a debt consolidation loan.

-You should make a list of all of your outstanding debts that you have. Make certain that your debt can be consolidated in the first place before making a loan.

– If you got an unfavorable offer from a bank for your debt consolidation loan with interest rate being too high, do not hesitate to check your options with Loans Geeks. We will present you with most competitive offers from less traditional, yet reputable financial institutions, who will typically give you much better deals for debt consolidation than banks.

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Yes, debt consolidation loan can be paid for late or any missed payments. You can not only pay the debts easily but also stay updated on the payments made to your creditors.

Yes, you can choose the debts that you want to pay off with the debt consolidation loan. It is up to you to include all of them, or you can leave out the ones you do not want to add.

After you enter into an agreement with the lender for debt consolidation, the company will contact the creditors and notify them to discontinue making any calls to you. They will send a legal notice to them to end those calls within a matter of few months.

The duration of the payment depends on many factors – how much money you can afford to pay each month, your current outstanding debt, and more. If your outstanding debt amount is huge, you will need a longer period to pay them off. Also, if you can pay a higher amount every month, you can pay off your debt much faster.

Depending on the method of debt consolidation, you can save on the interest. Since you have consolidated all your debts with a single loan of low-interest rate, you can easily save a considerable amount of money.

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