How to Use Debt Consolidation to Help You with Your Debt in Winnipeg
Are you in need of some debt help? If you are contemplating consolidating your debt to help you solve your financial problem, then read on as we discuss debt consolidation in today’s blog.
What Is Debt Consolidation?
Debt consolidation is when you take 2 or more of your existing debts and group them together into one debt. You can do this by taking out a consolidation loan from a bank that is large enough to pay off your existing smaller debts. It works well because you can normally take out a consolidation loan at a lower interest rate than you would get on a credit card or pay day loan. The lower interest rate gives you the opportunity to pay off the loan sooner than you would have done had you paid off each individual debt at higher interest rates. A consolidation loan can also simplify your debt repayment because you are making one payment instead of several payments each month.
What is required of you to consolidate your debts?
Before a debt consolidation loan can help you pay your debt, you first need to qualify for the loan. This means that you will need to have good credit as well as enough income to be able to afford the payments.
If you own your own home or have other large assets, you may be able to use that to secure a lower interest rate on your loan. When you have assets such as a home and also a good credit rating, the bank will see you as a lower risk investment and will often offer a lower interest rate. A lower interest rate than what you are paying now is the main goal, as this will help you to lower your payment each month and or decrease the amount of time you spend paying off your debt.
Is a consolidation loan right for you?
If your credit rating is low you may not be able to qualify for a consolidation loan. Also, if you believe the consolidation loan payment will be unaffordable, you should look into all of the options that are available so you can make an informed decision. In this case give us a call at 4 Pillars Winnipeg and set up a free consultation with our Winnipeg Debt Relief Specialist, who will help you look into other options. Call us at (204) 201-2100
