Are you in a cage of debt?
This is probably a question that will be asked as soon as the words debt consolidation is mentioned! It may sound like a corporate scheme that is going to cost you money, whereas, in effect, it’s a sound and proven financial plan that can save you a large amount of financial-related grief, now and in the future.
The process of consolidating your debt has attained popularity because it’s a legal method of significantly reducing the amount of debt you carry in Canada. Debt has in certain respects, today achieved the status of being on the same level as a viral disease. It’s a contest between you and making your regular interest payments each and every month to avoid financial and potentially social oriented penalties.
This is an ongoing battle for many Canadians, who remain captured in an indebted environment, without taking into consideration the alternative offered by having your debt consolidated. Indebtedness can take its toll on health and relationships and is further destructive by the fact that each month you fail to make the full payment due, your debt rises. It has been seen that once above a $20,000 ceiling, it becomes extremely difficult to reduce the amount of outstanding interest.
What is so great about debt consolidation?
If you’re in debt then you know the reasons, or should, and the question for you is how to get out of it? The answer is basic and once the confusion is removed about the term consolidating your debts it is relatively simple; it involves taking out one large loan, usually from a bank, to pay off all your creditors in one fair swoop. In effect, it means that you have just one monthly payment, which is frequently at a lower interest rate than you’re now paying. Accordingly, by the debt consolidation process, you save money on interest fees and you pay your loan off, faster!
An alternative to the consolidation of your debts is a debt settlement, which may be a reasonable solution in the short-term but it can also have negative consequences on your future finances. When considering a form of debt settlement ensures the method you select will include for re-establishing your credit record. Under the correct circumstances, debt settlement can be an option to debt consolidation.
However, it would be advisable to seek qualified advice regarding how your particular needs are best met by the consolidation of your debts or by settlement!