A debt consolidation loan canada can lower your interest rate and provide a monthly payment that fits within your budget. However, not all debt consolidation options involve a loan and some can offer much more significant relief like reducing or eliminating your debt payments altogether.
You can get a debt consolidation loan from several lenders in Canada. The best lender for you may depend on your credit score, income and current debt levels. You can find the best options by comparing lenders, rates and terms using online personal loan calculators. You can also apply with multiple lenders at once by filling out one online application. Doing so will only make a hard inquiry on your credit report once, which is less damaging to your scores than making multiple applications over a short period.
Debt-Free Dreams: A Comprehensive Guide to Consolidation Loans in Canada
Other ways to consolidate debt without a debt consolidation loan include debt management programs and credit counseling. While these options don’t provide a way to reduce your debt payments directly, they can help you understand how you got into debt and learn to handle your finances better in the future. For example, a debt management program with Consolidated Credit Canada helps you consolidate your unsecured debt into one monthly payment and negotiates with creditors on your behalf to reduce or eliminate your interest rates and fees.
Another option is to use home equity to pay off your unsecured debts. This is often referred to as a “second mortgage” and is available in most provinces. However, you should be aware of mortgage rules and speak with a qualified credit counsellor before increasing your home equity or applying for a second mortgage to pay off existing debt.