Taking a Loan to Consolidate Your Debt
If you’re struggling to keep up with your credit card debt, car loan debt or other consumer debt, then it’s time to consider your options. Debt consolidation has made the process easier and can help you secure simpler monthly payment plans along with lower interest rates.
What is Debt Consolidation?
Debt consolidation is used to manage your money. It’s a strategy in which a borrower takes out a loan to pay off all other loans. It’s done to secure a lower interest rate and for the convenience of one monthly payment over a longer period of time.
Here are a couple great options for debt consolidation:
Home Equity Loan – A home equity loan can be referred to as a second mortgage or borrowing against your home. This type of loan allows homeowners to obtain funds that are secured by your home’s current value on which you do not owe money. This type of loan has the advantage of carrying a fairly low interest rate. Another option for those with equity in their home is to refinance your property by increasing the amount you owe and then using the extra cash to pay off your debt.
Personal Loan – A personal loan is an unsecured loan that is not backed by collateral and is based on the borrower’s integrity and ability to pay. It is commonly used for the purpose of debt consolidation, vacation or purchase of goods. The upside to taking a personal loan is that the interest rates may be significantly lower than the interest on credit cards.
So if you’re tired of catering to a bunch of smaller debts then taking a loan to consolidate your debt is right for you. Managing money is difficult especially when you’re trying to juggle a large number of debts all of which have high interest rates. Don’t get swallowed up by interest. Prudent Financial Services offers the most affordable open loans to people with bad credit across Toronto and the GTA.