Whether you need help paying off credit card debt or an affordable mortgage, finding the right solution for your financial situation starts with understanding what type of debt you have. There is good debt (student loans, for example) and bad debt (credit card and payday loan balances, for example). Good debt helps you reach your goals, such as buying a home or starting a business. Bad debt holds you back and can cost you thousands of dollars in interest charges over the course of a few years.
Is getting a loan to consolidate debt a good idea?
Debt consolidation is one way to combine multiple debts into a single payment and potentially lower your interest rate. A debt consolidation loan can take many forms, from a second mortgage on your house to an equity line of credit. In general, a debt Consolidation Loan Canada | AlpineCredits.ca will be offered at a lower interest rate than your existing debts. Depending on your financial institution, it may also offer other benefits such as a lump sum payment or an extended repayment term.
The best way to find a lender that offers debt consolidation loans is to shop around and compare rates, fees, loan amounts and loan terms. Check with lenders to see if they require a certain credit score to approve you, and be aware that applying for several loans within a short period of time can lower your credit score temporarily. A loan broker, such as Loans Canada, can help you get matched with lenders that are open to financing your debt consolidation needs. It has the largest network of lenders in Canada and can connect you with lenders willing to finance borrowers with fair, poor and bad credit scores.