Debt Consolidation

Debt Consolidation: The Facts & Your Options

Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off others. Usually, the one loan is lower interest which saves you money. And having one single monthly payment is often easier to manage, and less stressful.

If you’re feeling overwhelmed by bills and multiple debts, consider debt consolidation.

Debt Consolidation is not combining loans – as each loan has its own interest rate and repayment terms. Debt Consolidation is obtaining a new, larger loan and then using it’s funds to pay off all the smaller loans you wish to consolidate. Edmonton’s low-rate, real estate secured lending is a wise way to consolidate multiple debts, and our mortgage team offers ways for clients to do so.

The Benefits of Debt Consolidation

One of the main benefits of acquiring a Debt Consolidation Loan is simplicity: not requiring to keep track of all your different lenders and repayment requirements – you’ll have just one monthly payment.

Oftentimes, people also find that overall, their monthly payments are reduced as you may be paying off high interest debts with the lower rate of your consolidation loan. By cutting down on the amount you’re paying at the end of each month, you’ll have a better cash flow. You may even find that you can pay off the loan in a shorter time frame by making larger payments on a lower interest loan. Because, you only have one payment, this leads to less stress.

With the significant appreciation in housing prices over the past decade, many Canadians are taking advantage of low interest rates and lender refinance programs. You may be surprised by the amount of money you can save.

Are There Any Debts I Can’t Consolidate?

Consolidation Loans are primarily for what is referred to as Consumer Debt – small personal loans, credit card or overdraft balances, even bills. Mortgages and your line of credit are not recommended for debt consolidation.

While you may be able to include your student loans in a consolidation loan, you may miss out on more cost effective repayment options. Student loans are offered at a very low interest rate, so we do not recommend consolidating your student loan debt.

It’s best to speak to a financial advisor before making any long term financial decision as they’ll have detailed up-to-date information on current lending rules and regulations. Contact our debt refinancing team in Edmonton today to consolidate your debt, fill out our online application.

Will I Qualify for a Debt Consolidation Loan?

In order to qualify for a debt consolidation loan, you’ll need to have an acceptable credit rating and proof that you have sufficient income to cover the cost of your monthly expenses in addition to your new Consolidation Loan payment.

With that in mind, a blemished credit rating will diminish your ability to secure a Consolidation Loan, therefore, it’s better to act sooner rather than waiting until your credit rating is too low to qualify.

If you’ve been considering a Debt Consolidation Loan, but want to explore your options to ensure you make the right decision for you – contact The Mortgage Force Team Today! Drop by our office on the south side of Edmonton to speak with one of our mortgage specialists.

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