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The support I received from the LoansGeeks advisor has been fantastic. They helped me reduce my payments by 10%.

Melissa in Ontario

Helped with $15000 in debt

I was looking for help with my credit card debt and I'm glad I came across LoansGeeks. Julia presented different options available for my situation and I was able to reduce my debt by over $1,000.

Jack in Vancouver

Helped with $10000 in debt

Mark called me back almost instantly and helped me save a few hundred dollars in a matter of days. It was time well spent talking to him.

Jessica in Hamilton

Helped with $5000 in debt

Your Options

Consumer Proposal

A consumer proposal is a legal debt settlement agreement between you and the creditors to settle the debt. Canada’s Bankruptcy and Insolvency Act governs this kind of legal arrangement.

A consumer proposal can be used by individuals who hire a licensed bankruptcy trustee to mediate and propose the creditors an alternative preventing you from declaring personal bankruptcy. The amount recommended by the trustee is based on your income and what you own. These proposals have the potential to minimize the amount of debt you need to pay to the creditors.

Are you eligible?

If you fulfil the following conditions, only then you are eligible for a consumer proposal:

  • You have credit card debts or unfulfilled unsecured debts
  • If your debt level is more than $1000 and below $25000
  • You are working, but unable to make a few payments every month
  • You cannot pay everyone the full amount with the agreed interest
  • You cannot have debt consolidation loan as the debts are too high.

How is a consumer proposal useful?
A consumer proposal is a statutory legal binding between an individual and the creditors which means:

  • Your assets remain your assets; there is no need to surrender them to the administrator.
  • You owe just what you vow in the proposal. Once the creditors accept the terms, you will not be asked to pay more even if your income increases.
  • Yes, you will face a negative credit score, but it isn’t as bad as in the case of bankruptcy. As is the fact, consumer proposals entail R7 rating as against R9 in case of personal bankruptcy (the lowest rank in credit score). This is the reason you should work out all your options before thinking of filing personal bankruptcy. By presenting a consumer proposal, you repay a part of your debt and boost your self-confidence.

Consolidation Loan

A consolidation loan is an instalment loan that can pay two or older loans with a new loan. This kind of loan has a longer payback duration, and the amount of instalment is less than the combined total of the instalments of the paid off loans.

Consolidating a loan implies you take a loan from one creditor and pay off all the other existing loans. It leaves you with just a single debt to worry about every month.

Who is eligible?

If you take a consolidation loan for the right reasons, it is good for you. These reasons include an urge to pay off the debt or reduce the number of payments. However, if you consolidate debt to borrow more, it is bad. It has benefitted people who are determined to pay off the debts or are willing to stop credit as a crunch.

How is it useful?

The whole purpose of taking a consolidation loan is to make your debt payment simple. There is only one creditor you have to deal with, and this will eventually result in paying less in interest payments.

But, before going ahead, you must work on other alternatives available.

Risk involved

By consolidating the debt, things can become more manageable, but it is not a solution to your debts. The liability still exists. Consider this: the terms and conditions of the smaller loans may prompt you to pay extra fees in a single go. One must take this into account before making a decision. You can opt for changing your habits such as spending less. Merging is good, but making alterations to your lifestyle is more important.

Debt Settlement

A debt settlement is a legal agreement between a creditor and a debtor wherein the creditor agrees to take less amount than taken. Usually, some unsecured debts namely credit card debt, medical bills, store charges, service contracts, billing disputes, lease defaults, signature loans, repossession deficiencies, charge-offs, liens, past due utility bills, judgments, debt stemming from lawsuits, attorney fees, can be settled. In most of the cases, the accounts eligible for a settlement are the ones which have been declared as delinquent or are declared uncollectable to settle.

Who needs Debt Settlement?

Debt settlement is needed when there are too many skipped or late payments and collection accounts.

A collector is not ready to accept anything less than you owe if he has the reason to believe that you can pay the full amount.

The credit score is scrapped, and the income is not sufficient to match the debt obligations.

Debt settlement companies negotiate with the creditors to reduce your payments. However, it cannot be an option on many types of debts.

It isn’t a great an option. It is not a good option for many people. It is risky and may not work for many people. It may also prolong the financial pain. A debt settlement doesn’t stop collection notices, late fees, and threats of being sued when the settlements negotiations are to be played out. Though it is not easy, if you succeed at reaching a debt settlement with the creditors, it will take years to come into effect.

Credit Counselling

Credit counselling is nothing but a means to improve an individual’s financial condition. While some people need to learn how to budget, some have grave concerns about the credit and still many more need help to deal with their debts. Nevertheless, credit counselling is a means to resolve an individual’s financial problems and offer him further help.

Who needs Credit Counselling?

If you are in debt and fear personal bankruptcy, consider enrolling yourself in credit counselling as soon as possible. It is determined that with the right credit policy in place, you can get your finances running smoothly. This, in turn, helps in preventing undertaking other debt solutions such as personal bankruptcy and consumer proposal.

What happens during credit counselling?

Generally, credit counselling takes no more than 30 minutes whether you are taking an online credit counselling or telephone credit counselling.

  • Information: You are required to provide essential contact and demographic information.
  • Financial Situation: You are required to share information about your assets and income.
  • Budget: You are required to provide a detailed list of your expenses. Thereafter, you will receive an analysis of the expenses and recommendations on how to reduce them.
  • Debt: you are required to pull your credit report for a detailed list of the credit card debts and the other loans.
  • Solution: you will receive a debt relief solution.

Here is how the credit counselling will prove beneficial to you:

  • The credit counsellor assists in preparing a budget that an individual can live by.
  • The credit counsellor negotiates with the creditor on behalf of the individual.

Budgeting

Budgeting is a process to plan how to spend your money. This plan is called a budget. It helps in creating a spending plan for your money. It ensures that you have money for the essential things you need. By following a budget plan, you keep yourself out of any debt or work on different manners, if you are in debt.

How is budgeting useful for an individual?

  • A budget is a way of being mindful of how you spend your money and also how to save it.
  • It keeps you focused on the money goals. You stay away from overspending.
  • It is indeed the best way to organise your savings and spending.
  • It is a plan you make for emergency costs.
  • It determines whether you should take debt and if yes, then how much.
  • It gives you an early warning for any potential problems.
  • Eventually, it helps you eliminate unnecessary spending and save money.

 

Who should consider budgeting?

You should consider budgeting if you:

  • Work on limited money
  • Try to make the best use of money
  • Plan to retire early
  • Try to solve your debt problem
  • Wish to work on a financial goal

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