Debt consolidation is a loan granted by a financial institution that gives you the option of reimbursing several (or all) of your creditors in one single payment. This will enable you to have only one loan with your financial institution, in order to simplify your debts by combining them in one single repayment. Debt consolidation can also provide you with a lower interest rate than the one charged by your creditors, so as to reduce interest charges.
This option can be particularly interesting if you have a number of unpaid amounts at high interest rates, for example, on credit cards or store financing cards. In most cases, your financial institution will pay the charges and you will have to make only one single monthly payment.
However, you should be aware that some debts, such as a mortgage, cannot be added to this loan. It is by contacting your financial institution that you will be able to find out all the debts that can be consolidated. In addition, it is recommended to check with several institutions before choosing your creditor, as interest rates vary from one place to another.
In order to qualify for debt consolidation, a consumer must have an acceptable credit rating and sufficient income to demonstrate that he is able to manage the loan. The consumer must therefore show that he has the ability to make the monthly loan payments, in addition to paying his regular expenses and monthly bills.
If your financial situation prevents you from obtaining a personal loan from a bank or a reputable institution, Poupart Trustee Inc. can offer you an alternative that is very likely to be within your reach, through a consumer proposal. This solution will enable you to consolidate your debts in one single monthly payment.
Click here to learn more about a consumer proposal.
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