Is a Debt Consolidation Loan Canada Right For You?

Is a Debt Consolidation Loan Canada Right For You?

The answer to that question depends on what kind of debt you’re trying to deal with. There are two broad categories of debt: secured and unsecured. Secured debt is backed by an asset, like your house or car. That means if you fail to make your payments, the lender can take control of that asset to recover their loss. Examples of secured debt include mortgages, automobile loans and some student loans. Unsecured debt does not involve any assets and includes credit cards, unsecured lines of credit, and some medical bills. This link:

Consolidation Loan Success Stories: Canadian Tales of Debt Transformation

When it comes to getting a debt consolidation loan, lenders are looking for two things: an acceptable credit rating and proof that you earn enough to cover your day-to-day expenses and debt payments (you might have to cancel that Lamborghini lease). If you have a blemished credit score or don’t have enough income to pay your debts, a lender will likely reject your application.

A debt consolidation loan could be the right option if you’re struggling to manage multiple small debts. By rolling them into one larger debt, you can achieve a lower interest rate and a more manageable monthly payment.

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