Finding debt help using debt consolidation in Medicine Hat
Today I would like to paint a clear picture of what debt consolidation is and how you can use it to help you with your debt in Medicine Hat. What are the pros verses the cons of debt consolidation? Will debt consolidation provide you with the debt help you need? Let’s find out.
How Does Debt Consolidation work?
Debt consolidation is essentially grouping 2 or more of your debts into one larger debt making only one payment. This is normally done by taking out a bank loan big enough to pay off all of your existing consumer debts. A loan from the bank will often have a lower interest rate than credit card companies will, saving you some of the money that would normally go toward the interest.
Pros vs. Cons
Like most things in life, there are also pros and cons in consolidating your debt. A few of the benefits of consolidating your debt are as follows:
~ Once you are approved for your consolidation loan, the bank will ensure that your creditors will be paid in full.
~ Your one loan will most likely be paid off sooner than all of the smaller debts as the interest rate on a loan from the bank is often lower than that of unsecured debts such as credit cards or pay day loans. Therefore more of your payment goes directly to the principle of the loan rather than paying more towards the interest.
~ It is simpler to make one payment every month instead of making several payments to different lenders or credit card companies.
On the other hand, there are a few things to consider when thinking about consolidating your debts.
~ You need to qualify for a consolidation loan. If your credit isn’t in good shape, you may not be approved for the loan.
~ You need to be able to afford the new payment. If you do not have enough income, you may not qualify for a consolidation loan.
~ It is very important to make your payments on time. If you miss payments it can affect your credit rating.
~ Usually the bank will require you to cancel your credit cards in order to go through with a consolidation loan.
How can you know if Debt Consolidation is right for you?
In order for you to know whether or not a consolidation loan is right for you, let me ask you a couple of questions.
Do you have 2 or more debts that have high interest rates?
How is your credit rating? Is it good?
Do you have enough income coming in to make a payment plan work?
Are you ready to change your spending habits so that you don’t fall into the same spending patterns?
If you answered yes to the above questions, then it would be a good idea to think about taking out a consolidation loan to help pay off your debts. If you answered no to any of those questions, or you want to learn more about debt consolidation or find out other options for debt help, call 4 Pillars Medicine Hat at 403-332-7361 to make an appointment for a complimentary consultation. We can go over your individual situation and discuss what type of debt help will be best for you. Remember, we work for you not your creditors so your best interest is always what we have in mind.
