Complete debt consolidation loans -Do you need help with debt consolidation?

Debt consolidation is often the first solution offered to people who want to reduce their monthly payments on their debts. Doing debt consolidation saves interest and has only one payment to make to a single creditor.

 

Do you need help with debt consolidation?

The basic principle behind debt consolidation is to combine several debts into one and obtaining a debt consolidation from websites like Dedebt can help you.

The consolidation loan will allow you to repay, all at once, all your debts at high-interest rates: credit cards, lines of credit, personal loans, etc. Once these debts have been paid off, it is important that you close your accounts to avoid going into debt again. Closing your accounts is often a requirement of the consolidation loan.

Take the fictitious example of John who has several debts and who wishes to consolidate debts:

Before

Debt Balance Interest rate Monthly payment Time required to repay Interest paid
Credit card # 1 $ 5,000 19% $ 180 3 years 1 month $ 14,952
Credit card # 2 $ 10,000 19% $ 230 6 years 3 months $ 7,071
Line of credit $ 24,000 12% $ 500 5 years 6 months $ 8,856
Personal loan $ 18,000 10% $ 385 5 years $ 4,900
Total $ 57,000 13.2% $ 1,295 6 years and 3 months $ 35,779

After

Debt Balance Interest rate Monthly payment Time required to repay Interest paid
Consolidation $ 57,000 10% $ 1,211 5 years $ 15,665

We, therefore, notice that consolidation of debts would allow Jean to save $ 20,114 in interest, to repay his debts faster and all with a slightly lower monthly payment.

 

When is debt consolidation beneficial?

debt consolidation beneficial?

Debt consolidation is not necessarily a win-win solution. Here are several signs that debt consolidation would be appropriate for you:

  • You have several unsecured debts (credit cards, lines of credit, etc.)
  • Interest rates on your debts are high (over 15%)
  • Having trouble making your monthly debt payments

 

What are the criteria for being eligible for debt consolidation?

debt consolidation?

Since debt consolidation is a loan of money, you must be eligible with a financial institution or a bank. The following criteria are generally required:

  • You must have a good credit score
  • You must have a job and a stable income
  • You must have an endorser in some cases

 

What if I am refused a debt consolidation?

debt consolidation?

If your bank or financial institution refuses you a consolidation loan, you still have several options before you.

The first option to consider would be a consumer proposal. This solution allows you to offer a partial repayment of your debts to your creditors over a period of up to 60 months. For example, if you have $ 30,000 in debt, you could offer to pay off $ 15,000 over 60 months, or $ 250 a month. To make a consumer proposal, you must consult an authorized insolvency trustee.

If the consumer proposal is not accepted, but you have equity available on your property, you may qualify for a mortgage line of credit. It is a line of credit guaranteed by your property (house, condo, etc.). The interest rate on such a margin is attractive, but make sure you can make the payments, otherwise, you could put your property at stake.

Ultimately, your last resort is bankruptcy. By declaring personal bankruptcy, you were all your debts (with the exception of certain non- dischargeable debts such as fines imposed by the Court). Bankruptcy is your right to a second chance.