Debt consolidation
What is debt consolidation?Debt consolidation is a process of obtaining a loan to pay off in one go the full balance of part or all of your debts. So you no longer have one debt to pay: the consolidation loan you agreed the financial institution.
How it works ?
To make a debt consolidation, you must first find a financial institution that will agree to give you a loan. Banks and other lenders will consider your credit score, your debt ratio and your employment status (employee, self-employed, unemployed, etc.) to assess the risk you represent.
In the event of a refusal, it is possible to repeat the steps with another financial institution. However, it is important to know that every debt consolidation application generates a note to your credit file. After two or three unsuccessful attempts, so it is best to look for other solutions.
Benefits of Debt Consolidation
Simplify management of your debts by consolidating all of them under one loan;
generally allows to benefit from a lower interest rate and cost savings;
Can help you avoid bankruptcy.
Disadvantages of debt consolidation
It can be difficult to see make a consolidation loan;
Once the consolidation application is accepted, there may file opening fee;
Does not alleviate the total amount of debt you have to repay;
Financial institutions are usually inflexible and difficult to tolerate late payments;
Certain types of debts such as mortgages are not subject to debt consolidation.
Is this the right solution for you?
Debt consolidation can be a viable solution for you if:
You hold a steady job and have sufficient income sources;
You have a good credit rating and an acceptable debt ratio in the eyes of financial institutions.
If you want the opinion of professionals in financial restructuring and debt management before beginning your search for a consolidation loan, Ginsberg Gingras of trustees and their team are there for you. They carefully evaluate your situation with the respect you deserve. Discretion assured.
