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Debt consolidation loan in canada

A loan sufficient to clear off the debt s that you owe to different creditors at the same time is known as a debt consolidation loan. in other words, in stead of havin g different loan s of differin g terms, size and creditors, you will be havin g one sin gle loan from the in stitution that you borrowed it from. Besides givin g you the convenience of gettin g rid of your debt s through a one time payin g option, debt consolidation generally will gain you some money.

 

This is due to the fact that generally the in terest you have to pay on your consolidated loan will be lower than that you would have paid otherwise.The bank or the fin ancial in stitution where you approach for debt consolidation loan will take care of your debt s and clear them off as you make a prefixed monthly payment to them in return.

 

Types of debt s eligible for consolidation: Most consumer loan s, debt s lin ked with credit cards and loan s similar to them are eligible for debt consolidation in canada. loan s like mortgage loan s are, however, in eligible for a debt consolidation , normally. It would be advisable though to confirm with your fin ancial in stitution of the eligibility of the debts you have to be consolidated.

 

Qualified debt: Your credit history effectively will be the decidin g factor as to whether or not you qualify for debt consolidation in canada. The in stitution would also check your in come level so as to make sure of your ability to repay the loan , before approvin g it. You may normally need to produce proofs of your latest paychecks for this.

 

Advantages and drawbacks of debt consolidation loan in canada

 

  • It is estimated that an average citizen of canada has to repay almost 11 different creditors each month. Therefore consolidatin g the in dividual loan s in to a sin gle one thru debt consolidation simplifies the repayin g process and also helps in havin g a clearer picture of the amount that is to be paid at a certain period of time.
  • Generally, the in terest rates on the consolidated loan will be lower as the risk in volved in issuin g such loan s will be less for the company as they will be secured loan s. This means that the monthly amount that has to be paid by the debt or will be less.
  • As the repayment of the in dividual loan s that existed before availin g the debt consolidation loan will be handled by the company, you wont have to worry about dealin g with them directly anymore in connection with the repayment of the loan s.
  • Drawbacks:

     

  • The debt doesnt get cleared but only gets more manageable. There is even a danger of gettin g in to newer debt s as havin g to pay lesser amounts towards the debt repayment can lure you in to in vestin g extra money in to thin gs which you wouldnt otherwise have.
  • The time period to clear the debt s would be much longer in case of the secured loan and the total amount to be paid will be higher than if the in dividual loan s were paid of in dividually.
  • You will stand to lose the collateral if you fail to repay the secured loan in time.
  • Whom to contact: You may avail help from any of the followin g organizations in canada to clear your doubts about debt consolidation and to get in formation regardin g your creditor.

     

    Government organizations:
    Nova Scotia i debt or assistance program
    Service Nova Scotia and municipal relation
    canada
    Tel: (902) 424-5200

     

    Saskatchewan Provin cial Mediation Board: Workin g under the guidance of the Saskatchewan justice department

     

    Regin a Saskatchewan

     

    canada Tel: (306) 787-538

     

    Saskatoon- tel: (306) 933-6520

     

    Fax: (306) 933-7030

     

    Charitable and non-profit organizations:

     

    Credit Counseling canada (CCC): CCC is a national association of non-profit credit counselin g providers of all the provin ces and territories in canada.

     

    Ontario association of credit counselin g services (OACCS) : OACCS is a charitable organization providin g credit counseling services.

     

    Tel: 1-888-7-in -debt

     

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