Being in debt is not unusual in today’s economy. A number of people suffer from hefty student loans, owe money on their homes, or are struggling with credit card debt. Often, it’s not even a matter of overspending, but rather just the fault of circumstance and harsh economic times. For many, it’s a living nightmare that constantly plagues their every thought to the point that they are afraid to answer their phone because it might be a call from a collection agency.
There is a light at the end of the tunnel, though: people like the Counsellors at Credit Canada Debt Solutions can help you make the right decisions when it comes to paying off your debt. They’ll walk you through a few options like the ones below.
Debt Consolidation Loans
A debt consolidation loan is when you ask a lender to take on all of your unsecured debt (credit cards, personal loans, bills, etc.) as a single, combined loan, allowing you to pay less interest over time. If you apply with major banks or a credit union you will receive a number of benefits, including:
- Single monthly payments
- Often a lower, set interest rate
- Generally no fees
While consolidating your debt with a bank or credit union can help you pay it off faster, there are also disadvantages. For example:
- You need a good credit score to be approved
- Collateral like property or other assets may be required
- Interest rates may be high, especially if you are a high-risk borrower
- Access to credit allows you to continue to accumulate debt
Unfortunately, even if the debt gets paid off using a debt consolidation loan, poor spending habits will put some people right back where they started, or worse. That’s where a Credit Counsellor can help.
Debt Consolidation Programs
Unlike getting a loan from a bank or credit union, a Debt Consolidation Program or DCP involves working with a Credit Counsellor who will consolidate all of your unsecured debt into a single monthly payment. They will also negotiate with your creditors to eliminate or reduce interest and work with you to put together a payment plan, guiding you every step of the way. You can also expect:
- Interest relief in many cases
- Lower single monthly payments
- Easy transfers by telephone banking, debit card, or money order
- Automatic and tracked payments to creditors
- Qualified counselling and coaching
Imagine having someone on your side providing judgement-free advice and there to stop creditors from constantly calling you. Credit counsellors are ready to fight for your best interests.
A consumer proposal is when you make a legally binding agreement through a Consumer Proposal Administrator (or Licensed Insolvency Trustee) to pay off a portion of your debt to your creditors. You’ll receive immediate protection from collection companies, interest accumulation will cease, and the payments will remain the same even if your income increases.
The problem with consumer proposals is that they, like bankruptcy, are considered a form of insolvency and will show up on your permanent record. It can also be difficult to qualify for because you need a good paying job with a steady income.
Which Works for You?
You definitely have options when it comes to paying off your debt, but a Debt Consolidation Program is generally your safest route. With a certified Credit Counsellor you’ll have the support you need to achieve your goals and pull yourself out of financial misery.
Latest posts by Scott (see all)
- Is Now the Time to Start Putting Your Money Back into a Savings Account? - February 26, 2020
- How to Start Investing in Real Estate - February 18, 2020
- Five Tips for Financing Investment Property - January 8, 2020