Handling debt can be quite a traumatizing and anxious experience. Many times, banks refuse to grant a consolidation loan, which can be quite scary. It may be helpful to know that even though a bank turned down your consolidation loan, there are still several options which may be useful to you for finding the right solution. Firstly, do not be mistaken that you are the only one struggling with debt. On average, Canada is believed to be under a debt of close to $1.8 trillion (including mortgages) which keeps increasing year on year. The stress and anxiety of debt can be quite overwhelming which is why many Canadians consider alternate solutions such as personal debt consolidation.
What does Personal Debt Consolidation Programs and Loans mean?
Debt consolidation can be defined as a process of combining multiple debts into one. However, not all debt consolidation is created equally. Different debt consolidation programs and debt consolidation loans work differently. As a borrower, you need to carefully research your options and find the most suitable plan for yourself. Usually, a credit counsellor works with your credit providing company to help you pay off your unsecured debt over time within the confines of a Debt Consolidation Program. Unsecured debt is a debt that is free from equity, for instance, a car or a home loan or even credit cards, payday loans, dental bills, etc.
With a debt consolidation program in place, your credit counsellor is likely to prepare a proposal that includes a monthly payment plan for you. This monthly payment plan will indicate how much money you are willing to pay every month towards your debts. The program also includes your estimated monthly expenses. Once the program is made, your credit counsellor sends a proposal to each of your creditors. After a review, if the creditors accept your plan, there are many advantages to a debt consolidation program.
- Firstly, it relieves you from the hassle of managing multiple debts. Here you need to have a single affordable monthly payment, which is then automatically channelized to your debtors.
- You may get a substantially reduced or even eliminated interest on those debts.
- Adequate visibility of timelines, when the debt will be repaid
- Freedom from collection calls
Although a Debt Consolidation Program will need you to temporarily surrender all your credit cards, you can still apply for a secured credit card during the program. In addition to freeing you from your debts, your credit counsellor can help you to work towards rebuilding your credit score and achieving your financial goals.
The chances are that you may not exactly be prepared to commit yourself to debt consolidation and work as per a designated credit counsellor. After all, it is difficult to trust someone else to make your life plan. We at Lending Experts understand this block. Our credit counsellors work in tandem with you to answer all your questions before on boarding. We ensure that we handle each case with empathy and full dedication and help families in Burnaby and Maple Ridge to realize a debt free life through debt consolidation. Call us today to know what we can do for you.