How to Get Credit Card Relief in Canada?

Suppose you have been using credit cards as your financial lifeline, and now it’s catching up with you. In that case, you would want to know how you can get debt relief. You should create plans, find options, solutions, programs, and seek advice for Canadians facing credit card debts. If your credit card debt is so high that you don’t feel like the minimum amount of payments is reducing the debts, you must take the right steps to ease such financial challenges. With reliable credit counseling from financial and debt management experts, you will be able to create a concrete plan to repay your debts successfully and get your finances back on track.  Depending on your current financial situation, you may negotiate better interest rates. However, you need a financial and debt management expert to advise you and negotiate relief from your credit card debts. York Credit Services can help you develop an individual money management program, help you in money management, and help you find the right way to reduce your debt.

Negotiate Credit Card Debt Relief Yourself

Negotiating credit card debt relief involves requesting your credit card company to lower the interest rate they’re charging you. If you have a balance, a low-interest rate means you’ll be paying less interest. So, with every payment you make, a more significant part of your credit card debt balance will be paid off instead of being gobbled up by high-interest charges. The right time to renegotiate the interest rates on your credit card debt is when you realize you have no balance and you may still be up-to-date with your debt payments. Suppose you intend to call up your credit card company and request them to lower your interest rates. In that case, York Credit Services can offer expert guidance on how to handle such negotiations successfully. In case you’re behind on your debt repayment or have high credit card balances, York Credit Services can help you negotiate debt relief.

Get an Agency to Negotiate Debt Relief for You

If your credit card debt has reached a point where you cannot keep up with payments, it is time to seek professional help. The sooner you get a debt management expert to help, the more options you are likely to have. No matter the specific debt solution option you feel is right for you; it is essential to consult with a reputable finance and debt management agency. The agency will work with your creditors to find the most viable debt management solution for you. York Credit Services has been helping many Canadians to negotiate debt relief for many years. So, you can rely on our expertise and many years of experience.

Some Reasons why your Debt Consolidation Loans Applications can be Declined

Most Canadians often consider debt consolidation loans as the only way to solve their debt problems whenever they experience financial challenges. They do so in an attempt to lower the interest rate and combine all the expected payments into a single manageable monthly payment. This is not a bad idea for many people. However, qualifying for a debt consolidation loan is not as easy as most Canadians think. Some of the reasons lenders deny borrowers loan consolidation loans include bad credit score, lack of credit history, high debt, low income, and more. If you were denied a loan consolidation loan, consult with York Credit Services to learn more about other debt management options.

1. No Security for Debt Consolidation Loan

Nearly all financial institutions ask for collateral or security from people applying for debt consolidation loans, particularly if the borrower is having difficulties making their debt payments. Such lenders want to ensure that they will get their money back no matter the borrower’s financial situation. So, what happens to borrowers who don’t have assets to offer as security or collateral? Most Canadians resort to using credit cards to pay off their debts at a 20 percent interest rate. Others prefer getting unsecured loans from finance companies at 30 percent or higher. If you intend to reduce your debt, the odds are that such strategies will not be helpful because the more significant part of your debt repayment will go to interest. Consult with York Credit Service to learn more about debt management options.

2. Problems With Credit Report and Credit Score

There numerous credit score and credit report issues that can prevent you from getting approval for a debt consolidation loan. Generally, debts in collection and delayed payments hurt your credit score. High debt balances can cause more harm to your credit score and history. So, it is in your best interest to learn how a credit score is calculated and improve yours.

3. Not Enough Income to Qualify for a Debt Loan

A debt payment usually costs more each month compared to paying the minimum payments on your credit card. So, by the time you realize you could benefit from a debt consolidation loan, you may only be in a position to make the lowest possible payments on your cards. Keep in mind that credit card payments are so low that it will take you more than ten years to pay off the entire debt, and that is only if you ceased to use the credit card while repaying your debts. You cannot pay off a debt consolidation loan over a long period unless you have secured with your house (this may be considered a second mortgage). Most consolidation loans are amortized over three to five years, which means you will need to make high monthly payments. Unless your income is high enough to handle such payments, your debt consolidation loan application may be declined.

4. Not Enough Credit History in Canada

A credit card history reveals how you have been using credit in Canada. Most Canadians who apply for consolidation loans haven’t been using credit in their own name for a very long time. Keep in mind that it takes time to have a strong credit report or score, which means failure to have a long credit history might work against you. Another critical aspect of this issue is having credit that you no longer use. Suppose you have a credit card tucked away in your office cabinets or safe. In that case, you should understand that you must use it responsibly to build a positive credit history. Having a credit that you don’t use cannot help you. If you’re on a joint loan, it’s essential to understand that some financial institutions are likely to report information about the primary borrower rather than co-signers or secondary borrowers. This is another reason you should keep an eye on your credit report and ensure your credit information is reported accurately.

5. Too Much Debt

Canadian credit unions and banks will always allow you to borrow a maximum of 40 percent of your gross yearly income if you apply for a debt consolidation loan. That means if you apply for a loan in a bank, on paper, they will include your proposed loan in your current debt payments. These are the payments on your current loan, line of credit, mortgages, and credit cards. They do so to determine if your current credit exceeds 40 percent of your annual income. This comparison or measurement is known as the total debt service ratio. If your new loan is likely to put you over 40 percent of your income, then you may have to consider applying for a lower amount, or your application will be declined.

What To Do After Being Declined A Debt Consolidation Loan

Suppose your application for a debt consolidation loan was turned down, and you are wondering what you can do to overcome your current financial crisis and regain financial control or freedom. In that case, you should understand that being turned down for a debt consolidation loan is not the end of your financial freedom. There are other debt management solutions you can explore. York Credit Services has been offering finance and debt management advice, helping Canadians create debt payment programs, or negotiate debt relief for our clients. You can rely on our many years of expertise and wealth of knowledge.