WHEN AND HOW TO CONSOLIDATE YOUR DEBT

Debt Consolidation Toronto

Staying out of debt sometimes means taking big steps just to first get out of debt. We believe strongly debt-consolidation can be a great opportunity that simplifies eradicating red ink in the ledger to such a point that it gets easier to start making payments and get the momentum of financial wellness rolling.

Not every situation calls for it. Those who can escape debt without pursuing a consolidation loan, and do it within a time frame that’s shorter than the term of a loan, should just stick it out with the individual payments. If the consolidation loan’s monthly payment exceeds the sum of what you already pay on each individual balance monthly, then simply adjust your budget to free up more income toward debt service.

All of that being said, Toronto’s serial debtors who are ready to change their behavior can certainly benefit from concise debt consolidation. Please remember, your debt consolidation loan is an opportunity to go forth and approach money and credit more sensibly. Make the most of it.

NO WAY OUT?

Debt consolidation loans are made for exceptional debts. For many, it’s a nuclear option. The ideal borrowing candidate have exhausted every possible avenue to lower interest rates and make at least minimum monthly payments, but just have too many outstanding bills accruing more interest than can be kept up with.

Still, debt consolidation can sometimes be the most practical option going. It takes a perfect storm of burdens, though. Take a debt already has a high monthly payment and combine it with a lofty interest rate – say, something around or over 25 per cent. Combine it with the arrival of financial hardship, either brought about by personally irresponsible behavior, incidental personal or economic misfortune, or even a combination that puts an individual behind on a payment schedule.

As bills mount both in numbers and the sum of their balances, it’s easy to land in deeper waters than a person can handle. When the math works out that debt consolidation would wipe out debt more quickly than paying all balances off individually and while paying markedly less interest, it can be an incredible cost-saver.

Those are seemingly insurmountable circumstances, especially when individuals in debt delay taking action and the balances and interest mount month after month. Be that as it may, debt consolidation makes the most effective impact as a single tool used in concert with efforts to change root attitudes toward money.

That’s one more area wherein we can help. We’re ready and willing to help you approach credit and your personal finances more responsibly by assisting with finding smart credit counseling that helps change damaging root behaviors. We can’t always solve our problems entirely on our own; without examining ourselves and what led to the decisions that landed us in debt, a consolidation loan is nothing more than a “Get Out of Jail Free” card and an easy “out” to go forth and spend one’s way right back into debt.

We would recommend doing things “the hard way” before seeking a consolidation loan – set a new budget, commit to reducing your spending, pay extra on your highest-interest debts, and keep the momentum rolling. Sometimes, situations escalate past the point when those solutions will alleviate debt within a reasonable timeline. If the math pans out, go for a debt consolidation loan if it saves not only time but money – then go forth and spend into debt no more.