If you have ever missed one loan payment or you have ever received a collection call, it might be challenging for you to get a bank loan or a line of credit. This is why, if you have multiple debts, you need a debt relief option that helps you manage your debts every month to avoid defaulting and consequently damaging your credit.
Debt consolidation loans in Toronto will help you clear multiple unsecured loans and credit card debts. It is a great option when your creditors start threatening to take action, when you feel stressed by a loan, when your monthly income is not enough to pay the loan and meet your monthly budget, or when you have high-interest loans, such as payday loans, whose interest you need to be lowered. However, secured loans do not qualify for debt consolidation in Toronto, Canada.
This guide shows you how to find debt consolidation in Toronto to get out of financial trouble.
Debt consolidation in Toronto, Ontario is a debt relief option where you combine multiple debts into one. If, for instance, you have two credit cards – one maxed out for emergencies and bills and another for general spending – and a low-interest loan, you can consolidate the loans into one debt payable in monthly payments. If your first credit card has a debt of $5,500, the second a debt of $2,500, and the low-interest loan is about $700; you will have a total debt of $8,700. If the average interest for all the loans is about 16 per cent, and the total monthly payment is $460, you can reduce the interest rate up to 9 per cent and the monthly payments up to $350 or less after debt consolidation. Instead of making three payments every month, you will make one payment at a lower interest rate.
Debt consolidation in Toronto, Ontario is available either as debt consolidation loans in Toronto or as debt consolidation programs. In the former, you take a loan equivalent your total loans – in the example above, you take a loan of $8,700 – to pay off all your loans. You will then repay the debt consolidation loan in Toronto in monthly installments.
If you have bad credit and banks won’t approve your debt consolidation application, you can seek help from debt consolidation programs. In these programs, a professional will negotiate with creditors to consolidate your loans.
While you cannot consolidate secured loans, you can use a secured loan to consolidate unsecured personal loans. Most banks and credit unions might request you to present collateral to qualify for debt consolidation in Toronto. Besides collateral, you might need to present a co-signer, show proof of reliable income, show proof of residency and have a reliable source of income or employment.
For secured loans, you can get a home equity loan, which can be offered in the form of a second mortgage based on the value of your home. You can also get car loans where you take a loan against the value of your car.
For unsecured loans, you will need a co-signer and proof of reliable income. Most online peer-to-peer lenders, those that offer payday loans without credit check, are willing to offer debt consolidation in Toronto, Canada, without collateral.
Debt consolidation in Toronto, Ontario, helps you in many ways:
Makes your debts more manageable – If you have debts whose monthly payments surpass your budget, you need to consider debt consolidation in Toronto. You can use the debt consolidation loan in Toronto to pay off these debts and make one monthly payment which is less than what you would make paying multiple debts.
Reduce interest rates – You can also use debt consolidation to reduce interest rates on loans. If you have payday loans with no bank statement or payday loans on disability income and credit cards, you can consolidate the loans to reduce the interest rates you pay every month. This further reduces the monthly payments you make.
Save your credit – With multiple loans, you risk damaging your credit. As such, you can use a debt consolidation option to replace multiple loans with one loan. Again, since payments are manageable, it is easier to clear your loans and build your credit history.
Take advantage of promotional offers – If you have multiple maxed out credit cards, you can transfer their balance into a balance transfer credit card. Balance transfer credit cards have very low interest rates, zero percent in most cases, and the promotion runs for about six months. While the promotion lasts, you will make credit payments with zero percent interest. While you will pay a credit transfer fee, this might be the lowest cost debt consolidation option.
When seeking debt consolidation loans in Toronto, what you need is a company that is not only licensed but also offers the lowest interest rate. Some of the factors to consider when choosing the best debt consolidation in Toronto include:
APR – The annual percentage rate of the debt consolidation loan in Toronto should be lower than what you’d have to stay if you stayed with your multiple loans separate. APR shows the interest rates and all other fees combined.
Fees – Debt consolidation comes it origination fees but you can still find some debt consolidation lenders in the city of Toronto who do not charge origination fees. Other fees chargeable for debt consolidation in Toronto, Ontario, include early repayment penalties and late payment fees. Some of these fees might increase the APR you pay for a loan negating any advantages you may have when you consolidate a loan.
Loan Amount – You need to work with a lender who is willing to offer you enough to consolidate your debts. If your total debt amount is $8,700, the best debt consolidation in Toronto should offer you just that, $8,700.
What do consumers say about the lender – check out consumer reviews and complaints on sites such as Yelp and BBB Greater Toronto Area. A lender with more negative than positive reviews should be avoided. Again, stay away from lenders who tend to evade questions you ask.
Licensing – All lenders need to be licensed to operate in the provincial capital of Ontario, Toronto. The province of Ontario protects consumers through Consumer Protection Ontario. You can check whether a lender is licensed on Consumer Beware today.
One way to find the best debt consolidation in Toronto is to check reviews and comparisons on Loans Geeks. Instead of checking out individual lenders online, you can see how lenders compare on Loans Geeks and which lender offers the lowest interest rate in Toronto. If struggling with guaranteed payday loans in Canada, you can see which debt consolidation in Toronto, Canada, option is right for you. You can also get a mortgage broker or an insolvency trustee from the site to help you manage your debts or file a consumer proposal. Anything you need about personal loans is available on Loans Geeks.
Whether you have a bad credit history or you have high-interest loans, it is easy for you to access debt consolidation in Toronto from banks, credit unions, or peer-to-peer lenders. You must consolidate your debts to make your debts more manageable and easy to pay. This way, you will keep your credit history looking good and you will have less stress. Again, you monthly budget becomes manageable and you can even invest in Toronto stock exchange. If you still cannot make payments after consolidating your debts, you need to consider other debt relief options such as consumer proposal.
With debt consolidation in Toronto, you get one loan that pays off all other loans. The interest rate for the consolidated loan might reduce but the loan amount remains the same.
A debt consolidation loan pays off multiple debts you owe so you will only have one loan that you pay off every month.
When you pay off multiple loans, your credit history will improve. Again, your loans become manageable and easy to pay off – this will further build your credit.
To qualify for debt consolidation in Toronto, you need to have collateral, co-signer, or reliable income. Banks might ask that you have all the three, especially if you have bad credit, but there are lenders who only for proof of income.
Without collateral, you need proof of income from a reliable source and a co-signer. However, peer-to-peer lenders are willing to offer you a loan with no collateral.