A lot of people are feeling the extra pressure as they face increasing bills during the pandemic. Is now the time to consider debt consolidation if you own a home in Ontario?
Do you know that the average household in Ontario owes around $124,700 to $157,700? Considering that the national average is just $114,400, it is clear that the average Ontarian has more financial responsibilities regarding debt. The good news is that applying for a debt consolidation loan is quite commonplace in Ontario especially for those who own a home.
What Is A Debt Consolidation Loan?
A debt consolidation loan is a loan that allows you to pay off multiple loans at once by using the funds from the loan. It combines multiple bills into a single monthly payment which is quite helpful for people who experienced a recent job loss, have unexpected expenses, have excessive credit card spending, or have too many credit cards to pay off. By getting a debt consolidation loan, financial obligations and multiple debts can be made easier to handle.
Debt Consolidation Benefits
Aside from making it easier for you to pay off multiple bills and debts, debt consolidation can improve your credit score. It is no secret that missing several monthly payments can drastically hurt your credit score. By being able to pay on time easier, your credit score can improve through consistent repayments. Once you have a better credit score, you may qualify for a lower interest rate for future loans. A small reduction in interest rate can easily translate to thousands of dollars in savings for big purchases. This will enable you to enjoy faster repayments and thus, make it more attainable for you to become debt-free. Above all, debt consolidation can bring you peace of mind with fewer bills to pay and seeing your finances improve little by little.
What Types of Debt Qualifies for Debt Consolidation?
Most lenders in Ontario have a limit to the type of debts that can be consolidated. Unsecured loans such as unpaid utility bills, credit card bills, and payday loans are usually qualified. Mortgages and car loans might be qualified under some lenders too, so be sure to inquire first.
Borrow Against Your Home Equity for Debt Consolidation
If you have a bad credit score, qualifying for a personal loan for consolidating debt might be challenging for you. The good news is that if you’re a homeowner in Ontario, you can use your home equity to access a big sum of cash to pay off your other loans. It works like a secured debt which means that the interest rate is friendlier to the wallet and the terms are slightly easier to qualify for. More so, getting a home equity loan for debt consolidation can allow you to benefit from the rising value of your property without having to sell your home. It’s a win!
Contact us as soon as possible if you need assistance with applying for a home equity loan for debt consolidation in Ontario. Our offices are open to serve you virtually as well.