DEBT CONSOLIDATION LOAN TORONTO
Time-effective home equity loans to provide you with the cash you need.
We can get you the financing you need
regardless of its purpose. We have solutions.
These are just some common situations when our customers contact us. If you have a unique situation that requires financing and it is not listed below we’ll still be able to help. Please contact us.
What is Debt Consolidation Loan & How Does It Work?
When late payments are mounting, debt consolidation allows for a loan to be taken out to pay off the sum of your debts. This is done by having all your debts compiled into an individual payment made each month. Perhaps debt consolidation’s greatest benefit is it allows you to leverage debts at a lower interest rate.
Debts can be paid off within set amount of time, usually 2-5 years and your fees will always be low. Funds can either be used to directly pay off the debt or deposited into your account giving you the responsibility.
Ultimately, your credit score will be protected, which is essential to your lasting financial stability.
How Do I Qualify For Debt Consolidation Loan?
We never check your credit score or ask for proof of income, unlike the big banks who have minimum scores to qualify borrowers. All you have to do is use the equity on your home as collateral. Debt consolidation is best for those seeking to pay off credit card debts, student loans as well as those who are self-employed and unable to prove distinguishable amount of income. Often we can have the funds in your account in as little as 1-3 days.
Debt Consolidation Loan Improves Your Credit Score
Debt consolidation makes a huge impact on your credit score by showing financial institutions that debts have been paid off to several accounts.
Banks assess credit scores as way to determine the level of risk in providing a loan. If you were unable to make payments or have previously filed for bankruptcy, then chances are your score will not meet the minimum required by the bank. However, rebuilding your credit score is crucial to securing loans in the future through traditional routes. Ultimately, if your credit score is not where it should be, debt consolidation is the best course of action.
It is imperative that all monthly payments be made on time and in full so your credit score does not further decrease. It is also recommended to not take out additional credit cards until after the payment period is completed.
As an added benefit, a debt consolidation loan registers as a new line of credit and by completing the loan period, you make the first step towards improving your credit score.
Pro’s and Con’s of Debt Consolidation Loans
- Interest rates are lower than those offered by the big banks
- Lower monthly payments
- You pay less money interest and have the debt paid off faster
- Only one monthly payment is made, rather than dealing with the confusion of paying off multiple lines of credit simultaneously
- It’s protects your credit score if you foresee the inability to pay off other newly acquired loans
- Improves your credit score
- Can use the equity on your home to pay off the loan rather than having to show proof of income or undergo a credit check
- If you do not have your debts organized and have a clear plan forward, it may be difficult to pay off the newly qualified debt consolidation loan and risk further damage to your credit score
- If payments on the debt consolidation loan are not made in full and on time, you risk losing your home as collateral
- Although monthly payments will be lower, there is still the potential you will pay more due to interest if the payment period extends longer than you had anticipated
- Debt consolidation is not a fix-all solution to your debts; it develops out of poor financial habits, therefore if your credit score is to be fully redeemed, budgeting and cost-cutting must be a priority. If you are unable to do so, you risk starting a cycle of taking out loans to pay off others.
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