Debt consolidation may be a suitable form of debt relief for those with a lot of debt. For anyone struggling to pay off multiple debts, this can be an ideal way to consolidate credit to reduce and simplify your monthly payments.
There are several ways to achieve debt consolidation, from debt consolidation loans to submitting consumer proposals. At priority plus financial, a professional will guide you through the various forms of debt consolidation to help you make the best choice for your circumstances.
Debt consolidation loans
A debt consolidation loan is a new loan obtained to condense several existing debts into one monthly payment. It is refinancing to make it easier to pay off various unpaid debts. To get a debt consolidation loan, you must have a steady source of income and be able to make payments that include interest. Debt consolidation loans can help you budget and often have lower interest rates than other debts. You can also spread it over a more extended period, making your payments more affordable.
Debt management plan
Debt management plans offered by credit counselling agencies allow you to consolidate your debt into one manageable monthly payment. This plan will help you pay off your debt within three years. A unique element of a debt management plan is that your credit counselor will try to negotiate a lower interest rate with your creditors. A debt management plan can simplify your debt while lowering the interest on your payments.
What debt can be included in debt consolidation?
Types of debt in debt consolidation generally include unsecured debt, which is not tied to specific assets, such as property or vehicles. It includes
- Credit card debt,
- Unsecured Credit lines,
- Pending invoices,
- Medical bills
- Daily Pay Loans
Debt consolidation can make paying off your unsecured debt much more manageable and often means your payments are spread out over a more extended period.
How is debt consolidation different from bankruptcy?
Debt consolidation takes many forms and can vary from bankruptcy. Bankruptcy is a legal form of debt settlement in which the debtor’s non-exempt assets are transferred to an Authorized Bankruptcy Administrator in exchange for protection from creditors and a new, debt-free financial start.
How do I consolidate my debt?
Use a debt calculator to understand your debt consolidation options and the associated costs. If you are having trouble getting debt relief, you should speak with an experienced Licensed Bankruptcy Administrator to understand your debt consolidation options. Di priority plus financial can help you by explaining how much debt you can consolidate and how much it will cost.
Does debt consolidation affect my credit report?
For debt consolidation loans, as long as you make your monthly payments on time, there will be no negative impact on your credit score. If you can lower your interest payments, you may even be able to improve your credit report through debt consolidation. A notification will be applied to your credit report when a consumer proposal is submitted. That is, it will be removed from your credit report three years after you complete the proposal or six years from the date you submit it, whichever comes first. Learn more about your consumer and credit proposals.