Debit/Credit Card Debt Consolidation Loans

If you are in debt, you are not alone. Studies indicate that most Canadian households are in debt, and the most common type of debt is credit card debt. If you are seeking a way of gaining control of your debt, you may consider debt consolidation. What is debt consolidation? This refers to combining your multiple debts into a single loan. The main aim of debt consolidation is to reduce the interest owing to debts. If you consolidate all your loans into a single loan, you will reduce the number of loan fees and interest. Most of the money you pay will go to reducing your principal amount, making you clear the debt faster. At YorkCredit, we can help you to assess and calculate your debts and recommend a suitable debt consolidation trustee or institution in Canada. You should not allow your credit card debt to crash you. You may feel anxious whenever you think of your ever-rising credit card debt. Due to the high credit card interest rates, most people are only able to make minimum payments every month. The principal amount does not go down but keeps rising. It may seem like there is no way out. The good thing is that with debt consolidation, you no longer have to feel trapped in debt. With debt consolidation, you will only be paying one installment every month instead of paying multiple installments. With a payment of one installment per month, managing your finances is easy, and you are not likely to miss on a payment. This helps to maintain a good credit history.

How do you go about consolidating your debit and credit card debts? The first step entails applying to an eligible institution or trustee. For instance, you may make an application in a bank or in a credit union. You may apply for a personal loan that does not require collateral. Upon loan approval, you can use the proceeds of the loan to clear your outstanding debit and credit card debts. You will then continue making monthly payments for the new loan in accordance with the agreed terms.

Other than enjoying one monthly payment and lower interest, debt consolidation also gives you the option of paying a lower interest rate per month. You can choose the option of a longer payment period because this helps lower your monthly installments. You will no longer have to channel all your monthly income into debt payment.

You will no longer receive debt recovery phone calls from creditors.  After the consolidation of your debts, all your creditors receive their payments, and you will not risk ruining your credit rating. If your credit rating was already ruined, consolidation might help you rebuild your credit rating. You will enjoy a peaceful life because you will no longer receive pressure from creditors.

Which loans are eligible for consolidation?  Some of the eligible loans include credit card debt, public utility debts, and consumer loans. You may not be able to include long-term debts like mortgage into the consolidation plan. Typically, you consolidate current debts. A credit counselor can help you determine whether the consolidation will be beneficial to you.