If you find yourself deep in debt, the options for digging yourself out can seem overwhelming.
It is easy to fall prey to debt solutions that can put you in an even worse position.
Thankfully, for those with a good enough credit score, there are personal loan options available that can be much better than many other alternatives.
Using a personal loan for credit consolidation could substantially lower how much you pay in interest.
Personal loan rates are generally lower than credit card rates, so consolidating could save you hundreds, or even thousands, of dollars in interest payments.
Below are the most common reasons: To learn more about what debt consolidation is and how it works in Canada, click here.
To consolidate all of your debts, your first option would typically be to approach your bank or credit union and see if they can help you.
If you have a mortgage, you might look to see if you have enough equity in your home to consolidate your debt with your mortgage.
This is usually people’s preferred option since mortgage interest rates are usually much lower than other loan interest rates, and mortgages can be amortized (paid off) over 25 years.
This means you can arrange much lower monthly payments than with another type of loan.
If you do choose to go this route, you should make sure that you try to pay off this extra mortgage as quickly as possible and don’t do this very often.