The Advantages Of A Debt Consolidation Loan In Canada
If you have a lot of credit cards, store cards and other type of debt, then you probably find that making the repayments on these debts take up a high percentage of your monthly income. A solution to this problem could be to take out a debt consolidation loan Canada which will allow you to incorporate all of your debt into a single monthly payment.
A debt consolidation loan Canada can be used to pay off all your other existing debt, leaving you with just the one monthly payment to make. The amount that can be borrowed for this type of loan will very depending on your circumstances but there is a good chance that you be able to pay off a large chunk, if not all of your existing debt. This is a very popular type of loan and it has several advantages.
The amount of money that you pay each for a debt consolidation loan is likely to be considerably less than you would be paying on each individual debt. This means that you will be saving money every month. If you were starting to feel as if all your payments were causing financial problems then this can really give you some breathing space.
If you were only making the minimum payment on your credit cards then you would have ended up paying a lot of interest by the time the balance was paid off. Interest rates on credit cards are also subject to change which means the amount that you would pay in total would increase. With a debt consolidation loan you will be told how much interest you will pay in total and this will be a lot less than you would originally be paying.
The other issue with only making the minimum payment is that the majority of this will be used to pay the interest which means that it could potentially take a long time for the balance to be paid off. A debt consolidation loan will be taken out over a fixed period which means that you will know for certain the date that you become debt free.
If you do take out a debt consolidation loan then you will need to be strict with yourself about not using your credit and store cards unless you are able to pay the balance off in full each month. The advantages that have been described above will only work if you have no other debt.