Debt happens. Is a Debt Consolidation Loan a good idea in 2022?
At some point in our lives, many of us have had debt that needs to be repaid. Sometimes when we have multiple monthly bills, it can be hard to pay them off and keep track of everything. A debt consolidation loan is a way to refinance your debts and can be very helpful for someone who has multiple bills and is starting to lose track of their monthly payments.
Consolidating all your debt into one consolidation loan can make paying monthly bills easier and more convenient. Consolidation loans often offer a lower interest rate and will combine many of your bills, which makes it easier to pay back more than your monthly minimums and start reducing your debt.
What qualifies a person for a debt consolidation loan in Alberta?
When applying for a debt consolidation loan, you apply for it through a lender such as a bank or credit union. These lenders consider many factors including your credit score, debt service ratio, assets, and income. Your lender will then decide if they will approve the loan, and if so, what interest rate they are willing to offer you. To qualify for a consolidation loan, you should have a good credit score. Missing your monthly payments or not meeting the minimum amount will have a negative impact on your credit rating, so it is important to act quickly if you are considering applying for a debt consolidation loan.
Who should apply for a debt consolidation loan?
There are many benefits for taking out a consolidation loan including smaller overall payments, one regular monthly bill, and a lower interest rate. You could benefit from a debt consolidation loan if you are spending more money than you earn, your creditors are threatening to take action, you are falling behind on your bill payments and are struggling to meet the minimum required payment, or if your debts are causing you stress!
Who should apply for a debt consolidation loan?
There are many benefits for taking out a consolidation loan including smaller overall payments, one regular monthly bill, and a lower interest rate. You could benefit from a debt consolidation loan if you are spending more money than you earn, your creditors are threatening to take action, you are falling behind on your bill payments and are struggling to meet the minimum required payment, or if your debts are causing you stress!
Don’t forget!
When you apply and get approved for your consolidation loan, sometimes the funds are placed directly in your account. It can be tempting to spend this money, but you must remember that those funds are there to help you get out of your financial burden. It is also important to set up a monthly budget for yourself. Sometimes after consolidating debt, people are tempted to incur more debts by making poor financial decisions like applying for more credit or overspending on credit cards. You must be committed to keeping your current and future debts under control.
If you are wondering if a debt consolidation loan is right for you, the team at Blanchard & Company can help you determine which route to take and will help make the best decision to get you back on financial track.
If you feel that your credit score or income might be holding you back from being approved for a consolidation loan, we are happy to discuss other options with you.
