According to Statistics Canada, the ratio of household credit market debt to adjusted disposable income crept up to 166.9 percent in the third quarter, up from 166.4 percent in the second quarter.
It’s sad to see so many Canadians struggling to manage their finances. By the end of this short guide, you’ll know more about debt consolidation than most Canadians.
And when it comes to debt, things become really murky. I’ll answer the questions I hear all the time from 4 Pillars clients including: Debt consolidation involves taking out one big loan to pay off many small loans.
If, like many college graduates, you have multiple student loans, you’ve probably heard the term “student loan consolidation” thrown around more than once when talking about repayment options.
Simply put, this is the process of combining your multiple student loans into a single, bigger loan, possibly with a new lender.
Debt settlement isn’t without pitfalls and consequences — and it isn’t for everyone.
Debt settlement is, simply put, hiring a debt settlement company to help negotiate lower payoffs on personal loans, collections, and open accounts like credit cards.
So if you want to look at the pluses and minuses of debt consolidation for your personal situation, you might want to start by considering your monthly cash flow — and ask yourself the following questions: Pro #1 — When you opt for debt consolidation, you have only one creditor to pay, and that company will call your creditors and negotiate on your behalf.
So when you get a debt consolidation loan, you can look forward to a certain amount of personal attention.
If, for example, you do start to get calls from creditors, a reputable debt consolidator will often be willing to speak on your behalf. For example, when you go with a debt consolidation plan, you're required to stop increasing your overall debt, which often includes limiting the use of your credit cards.
The average college grad leaves school with ,000 worth of debt.
Pro #2 — Interest rates are usually pre-set by creditors, so the debt consolidation firm handling your loan can definitely get lower interest rates and reduce (or even eliminate) late fees better than you can.