September 26, 2022

World Trades

Finance Blog

Get To Know More About Debt Consolidation

2 min read

Are you at the edge of your wit and not know how all your debt can be handled? You may have contemplated consolidating debts; maybe you have even tried to secure a loan from your bank, but have been denied. When it comes to debt consolidation in Toronto, some choices are there for you! Second, it will help you to know that you’re not alone if you suffer financially. Currently, the Canadian average owes almost 23,000 dollars in personal debt – not counting mortgages! In 2017, Canadian household debt rose to a massive $1.8 trillion (including mortgages), a 6% rise from the same year.

Debt Consolidation Programs

A Debt Consolidation is a credit arrangement service where your counselor meets your creditors and assists you over time in paying off your unsecured debt. (The non-secured debt is a non-equity debt, such as credit cards, dental bills, payday loans, and student loans.

Your financial adviser will make a recommendation outlining how much you will comfortably pay for your loans daily, depending on your monthly wages. They will then give each of your creditors this plan, which you will love when it’s accepted:

Debt Consolidation Loans

A debt consolidation loan consists of a loan that covers all of your debts. it is usually taken from your bank. Thus instead of repaying several different debts to different borrowers at different interest rates, you can only reimburse the one big loan at a set interest rate (which is ideally well below the actual interest rate on the different debts) But there’s a condition, you must have a good credit score.

But many credit companies take advantage of people in such stressful situations. Here are a few ways to avoid getting trapped:

  • Ensure that they are a credit counseling agency (NPO): NPOs aren’t trying to make money and they want to do so. You can check the status of NPO online from the Government of Canada.
  • Tell your concerns about the charges: A decent credit advisory agency won’t charge a fortune. Initial set-up payments typically amount to no more than $50 plus a minimum monthly maintenance fee.
  • Accreditation review: Check. Accredited companies to follow the business requirements lay down by the Financial Counseling & Planning Education (AFCPE) and Credit Counseling Canada (CCC).
  • Check the ranking of Better Business Bureau (BBB): The BBB organizations rank on the grounds of customer concerns, government approvals, advertising policies, and honest practices.