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Reasons to Choose a Debt Consolidation Loan

Posted by in Bank Loan
18
Oct 2018

A debt consolidation loan is a loan can be used to pay off all other outstanding debts. Often a bank, credit union or finance company will combine the amounts owed to your various creditors into one comprehensive loan that you pay down altogether rather than separately. The structure of a debt consolidation loan and its payment schedule are intended to be affordable and intuitive, with no hidden fees or misleading terms.

Need for debt consolidation

Debt consolidation is often considered preferable over other ways to consolidate debt, such as a home equity/second mortgage loan, a line of credit/overdraft, a credit card,, or by borrowing from family or friends. However, sometimes when we are in a proof credit situation sometimes bank or finance company loans have high interest rates and long terms that make getting out of debt feel impossible.

A Licensed Insolvency Trustee, such as Kevin Thatcher & Associates Ltd, are licensed by the federal government to offer proposal options that help you consolidate your unsecured debt without interest and, depending on the situation, where you may not have to pay back the entire debt.

If you are considering applying for a debt consolidation loan, Kevin Thatcher & Associates are licensed experts with over 15 years of experience. We offer free consultation to provide guidance and advice on these matters. For more information, please call Kevin Thatcher & Associates Ltd. at 1-866-719-8547 or contact us here.

Advantages of a Debt Consolidation Loan

  • There is just one monthly payment, rather than several to coordinate.
  • The duration of your debt payment is a set period of time
  • Unlike many credit cards and home equity loans, service fees are typically very low.
  • Lower interest rates are available, especially if you have a good credit score, a moderate to high net worth, an existing relationship with the lender, and collateral for the loan such as a valuable vehicle, term deposit or other liquefiable asset.
  • In recent years, interest rates on debt consolidation loans have hovered around seven to twelve per cent, whereas, rates for other loans range from fourteen per cent (for secured loans) to thirty per cent (for unsecured loans).
  • Overall, this means that a debt consolidation loan will save you money in interest fees while allowing you to pay off the total amount sooner and providing a single, straightforward means of debt payment.

Advantages of a Debt Proposal

  • There is just one monthly payment, rather than several to coordinate.
  • The duration of your debt payment is a set period of time, usually up to 60 months.
  • No interest or hidden fees.
  • Your credit situation does not affect your ability to file a proposal.
  • Assets, collateral, or a cosigner are not required to file a proposal.
  • Because you are making a deal with your creditors to clean up the debt based on your situation, you will often pay much less than the original amount owing.

Risks of Not Consolidating Your Debt

Firstly, by leaving your debt spread out among various creditors you are choosing to pay high interest rates on your credit cards and loans. If you apply for further credit and loans, you may not be approved because your debt service ratio is already quite high.

You may experience difficulty getting approved for an apartment lease or home loan. Landlords perform thorough credit history and background checks on potential tenants, and having outstanding loans to multiple lenders can be a red flag. Similarly, it can be difficult to receive a future loan for a vehicle, boat, or other large item with multiple outstanding debts.

Conclusion

Seeking financial guidance can be a stressful idea, so it often feels easier to postpone and procrastinate. Yet, the sooner these matters are addressed and a solution is implemented, the sooner your anxiety can be alleviated. The need for a debt consolidation is commonplace in today’s financial climate, and can be a stepping stone on the path to a solid and secure financial future for yourself and your family.

Kevin Thatcher & Associates is your best choice for reliable advice and consultation regarding proposal related debt consolidations . We have many years of experience in diagnosing financial situations and can help find a solution to suit your unique circumstance. Our services are transparent, and straightforward. We offer free consultation where you can all of the necessary information to make a confident and informed decision on your best route forward. We pride ourselves on providing debt consolidation services that exceed expectations and allow people to move forward debt free.

For more information, please call Kevin Thatcher & Associates Ltd. at 1-866-719-8547 or contact us here.

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