When someone finds themselves in the sort of debt that is unsustainable over the long term – the kind that appears impossible to clear with their current salary – debt consolidation loans in Canada can make life much easier.
How? By lowering the person’s monthly bills. Monthly bills can be lowered by taking out a debt consolidation loan, which allows you to:
- Gain access to enough cash to pay off your existing debts all at once
- Pay a new, lower interest rate on the fresh debt consolidation loan
- Simplify repayment by having all your debts combined in one place
Lowering interest rates on any outstanding debt is not just great from a financial perspective. It can also be a great psychological relief as well, whether you owe money to a credit card company, the bank, or other lenders.
A debt consolidation loan can help you manage your finances much more easily, granting you peace of mind, which is hard to put a price on. Interested in a debt consolidation loan but don’t know where to start?
Read on to learn more!
The Benefits of Debt Consolidation
People end up behind on their payments for a number of reasons. They may have bad spending habits, buying items they don’t need when they can’t afford it. Or, they may have normal spending habits but lose a job, making things difficult in the short term.
And in many places, the spectre of an unanticipated medical emergency can be a great worry, putting people in a precarious financial situation in which they have to choose between debt and medicine.
That said, It doesn’t make sense to pay almost 30% interest on your credit card debt when you could be paying a much lower interest rate to someone else. This is where debt consolidation is most helpful.
By creating a simplified repayment process to only one lender while reducing overall costs, debt consolidation loans can give people the space they need to breathe, giving them a sense of control over what can be a difficult situation. Sometimes that feeling of control is the first step in the journey to getting your financial life back on track.
Will I Need Collateral to Consolidate My Debt?
Whether or not you will require collateral to be approved for a debt consolidation loan will depend on your particular situation, your level of debt, your credit score, your job, and your financial history.
Many lenders do require collateral, but others don’t. The best way to find it to discuss your plan with an expert in the field, one with the kind of experience that will allow you both to properly weigh the variables and come up with an answer.
Why Not Borrow From a Bank?
In many cases, banks offer the best interest rates.
Because of their size, they can offer lower interest rates on many of their financial products, from mortgages to personal loans to business loans and beyond. However, banks are often not interested in lending money to those already in debt, because they consider it a risky investment.
This is why the alternative lending space exists. Alternative lenders are willing to take on more risk in order to realize some of the profits that big banks are leaving on the table. That increased risk, however, often results in slightly higher interest rates.
When making the decision to take out a consolidation loan from an alternative lender, it’s always in your best interest to carefully consider whether or not the new loan will be financially beneficial for you.
There are only a few ways to make this calculation, and one of the best ways is to speak to various lenders and compare the details. However, there is an even easier way, and that is to have a company like Credit Arch do the legwork for you, comparing all the loan products offered online at once, and providing you with a connection to the lender with the best rates, right away.
By using just a small amount of financial information provided by you through their simple form, Credit Arch’s advanced software can compare hundreds of offers from lenders around the country in seconds, and voila! You may end up pre-approved for a consolidation loan in no time, with the money in your account in as little as 48 hours.
Avoid Financial Trouble with Credit Arch
Don’t make the mistake that some people do by getting sucked into short-term payday loans with ultra-high interest rates. Payday loans are predatory products that often make a financial situation worse, not better.
With the right consolidation loan, you can gain peace of mind and lower bills by having:
- One monthly payment
- A lower interest rate
- A simple, easy process
To get yourself back on track, get in touch with us today and find out how we can connect you with the perfect lender.