A debt consolidation program could be your lifeline out of debt

When you’re finding it challenging to make minimum payments on credit cards or dealing with collection agencies, you know you can’t keep going on this way. You need a different solution to deal with your debt problem.

Debt Consolidation Programs are one such tool. They’re designed to help you manage your money, so you can pay off your unsecured debt, set financial goals, and track your spending. The best part is that a certified Credit Counsellor will negotiate with your creditors on your behalf to stop or lower the interest on your unsecured debt and lower your monthly payment. 

What Is a Debt Consolidation Loan?

When you’re already up to your neck in debt, do you really want to take out another loan? In some cases, a debt consolidation loan might make sense. When looking to get a debt consolidation loan, you would typically go to a first-tier lender, like  a bank, and ask for a new loan you can use to pay off your unsecured debts, such as credit cards and loans from other lenders, effectively rolling them all into one new loan at a lower interest rate. The debt consolidation loan is used to pay off all your unsecured debt, and you make a single monthly payment to pay off the new loan.

They make sense when you’re dealing with high-interest loans and credit products, you have good credit,, you have enough income to make payments, and you have a plan in place to help stop you from borrowing on cleared accounts again.

If you have unsecured debt and poor credit, you may not qualify for a debt consolidation loan. In that case, you should consider a Debt Consolidation Program. You can enroll in a Debt Consolidation Program in Ottawa with the help of credit counsellors at Credit Canada, a non-profit credit counselling agency that helps individuals across the country evaluate their debt relief options and set up a plan for success.

How Credit Counsellors Help

There are several things a certified Credit Counsellor from a not-for-profit credit counselling agency will do to help you become debt-free.

#1 Financial Assessment

The first step is assessing your current financial situation. They’ll look at your take-home pay, assets, savings, monthly expenses, and your unsecured debts, including credit card balances. They’ll ask questions to get a better picture of your expenses. They can help you add everything up so you can see the full picture.

#2 Find a Solution

There are several debt relief options you can consider to resolve your debt problem. A Credit Counsellor helps find the solution that best fits your unique situation. Possible options include:

  • Debt consolidation loan
  • Debt Consolidation Program
  • Consumer proposal
  • Bankruptcy
  • Budgeting

The option that’s right for you largely depends on how much debt you’re in compared to your income, as well as your assets, monthly expenses, and future financial goals. Credit Counsellors can help you negotiate with your bank or credit card lenders for lower interest rates and other solutions.

#3 Managing Money

Finally, a Credit Counsellor lays out the steps you need to take to manage your money and get back on track. First, you need to stick to your debt repayment plan, but a Credit Counsellor can also help you establish healthier money habits that will allow you to start saving.

Rebuild Your Credit with Debt Consolidation

Unlike solutions that forgive a portion of what you owe, taking out a debt consolidation loan can actually improve your credit score in the long-run. As long as you consistently pay the single monthly payment on time, it will have a positive. Credit agencies reward consistent progress on making payments. You can get out of debt without ruining your credit score.

Talk to a Credit Counsellor about finding the right debt solution for you. Debt consolidation can help you get your finances back on track.