How Debt Consolidation Will Work for You
Debt is an unavoidable fact of life. Job loss and our slumping economy adds to the equation, making the average debt load for Edmonton consumers some of the highest in the country. If you have a considerable amount of credit debt and your income is steady or now reduced, you’ve probably looked into ways of reducing your monthly payments. Returning financed assets, selling other assets, cutting back to essential expenditures can only do so much.
Juggling bill payments isn’t the answer. Late payments lower your credit score, remains on your credit report for years and effects your ability to borrow in the future. If you plan on buying a new home, vehicle or need financing for any other purpose within the next three to seven years in the Edmonton area, you may want to consider debt consolidation as a way to improve your credit report. Consolidating your debt will lower your payments so you don’t miss a regular bill payment (which lowers your credit score).
What is debt consolidation?
In general, debt consolidation is the process of combining all of your credit card debts, loans and other non-secured debts into one or a few manageable payments. There are many ways to do that: renegotiate your loan terms, consolidate with a bank loan, loan from friends/family, etc.
Alternatively, if you have equity available in your home, it’s possible to refinance your mortgage or get a second mortgage to deal with your unsecure credit and consumer debts. Converting these unsecured debts to a secured debt comes with some risk, though. With that option, make sure you can easily make your mortgage payments. Once you convert unsecure debt to secure debt your options for relief are few and mostly undesirable (sell your house).
What are the benefits of debt consolidation?
Debt consolidation for most people in Edmonton and Alberta in general is really more of a payment (cashflow) resolution.
- Reduces the number of monthly payments from several to one or two.
- In some cases, reduce the amount owed or interest charged.
- Pay debt off over 5 years versus 28 - 32 years making only minimum credit card payments.
Who is debt consolidation right for?
Debt consolidation is ideal for those living in Edmonton or anywhere in Alberta with a number of credit card type payments, who regularly carry a balance and can’t consistently manage all those minimum payments every month.
Consider debt consolidation (proposal to creditors) if:
- You are struggling to consistently meet your monthly payment obligations.
- You are unable to pay more than the minimum payments (extending your debt term).
- You have a reliable income and have some funds available to service your debt payment obligations.
- You are prepared to deal with your current debt before taking on more.
Debt counselling in Edmonton and Alberta
We understand how terrible it is to feel like you’re drowning in debt. At Moses Advisory Group Inc., you can rely on us to find the right debt solution for your financial situation. A debt consolidation (proposal to creditors) could be that answer.
If you’re unsure which option is right for you, we offer credit and debt counselling in Edmonton as a way to evaluate your specific situation. Give us a call today at 780-473-6333, email (firstname.lastname@example.org) or contact us through our website to set up a review of your specific situation.