Debt consolidation is the process of taking out one single loan to pay off various creditors so you do not have to make multiple payments at the end of the month. It is simply consolidating all your debts to one single loan that you can conveniently service at the end of the month. This means you do not have to worry about making multiple payments or keeping track with various creditors. It also means you’ll be receiving fewer calls from debt collectors. The debt consolidation loan that you choose to pay off all your debts should be at a low interest rate and have convenient monthly payment amounts that you can afford to pay within your current income.
At York Credit Services the debt consolidation process is quite detailed to ensure that we come up with the best possible solution. Every debt situation is unique and this is why our approach is customized for each client. The following are the vital steps we need to take to ensure that the debt consolidation process is effective
If you are struggling to repay your debts, you should not suffer in silence. Our experts will help you know your options of digging yourself out of debt. We will help you work on your debts, eliminate stress, and create a viable saving plan. We have helped many people overcome their financial and debt crises, and you, too, can benefit from our services. We will tailor a personalized debt management plan that suits your financial situation. We will also negotiate with creditors and persuade them to set manageable loan installments and wipe off accumulated interest rates and late payment fees. It does not matter the type of financial difficulty that you are experiencing. We will walk with you and help you organize your finances.
Our credit counseling services provide our clients with guidance on money management, consumer credit, budgeting, and debt management. Our credit counseling services aim to help you get your finances on track without having to file for bankruptcy. Our credit counselors will negotiate with creditors on your behalf and urge them to reduce your interest rates and late payment fees. We will take you through the following credit counseling phases:
The first phase of our credit counseling process involves a thorough analysis of your current financial situation. Our credit counselor will seek details regarding your income, assets, debts, and expenses. You should be transparent at this point and disclose all your relevant financial details to the credit counselor. The financial assessment enables the credit counselor to obtain information to create a practical solution for your debt crisis. The financial assessment phase may feel uncomfortable, and most people often feel like they are revealing too much personal information to the credit counselor. Even if this phase may feel like an invasion of privacy, our credit counselors have good intentions, and all they aim at is to get your finances on track.
After the financial assessment phase, we will have ample information regarding your financial situation. This will help us to craft the best debt solution that suits your financial situation. There are several debt management solutions or ways of resolving your debt issues. We will help you understand the debt solutions available to you. We have helped many clients get out of the debt crisis; you can count on us to recommend the best debt solutions.
We will recommend the best approach to handle your debts. Some of the typical debt solutions include credit consolidation, paying the small debts, and negotiating with creditors. How will you benefit from our debt solutions?
The last phase of our credit counseling process is money management. Proper money management techniques will help you avoid many financial problems, including wrong credit and bad investment decisions. After all, poor money management is the reason why many people get into financial and debt crises in the first place. Money management skills will help you handle all the aspects of your finances.
With all the payments that you have to make at the end of the month including utility bills, mortgages, car payments and credit card payments, it comes as no surprise that you may miss a few payments here and there. When you begin to fall back on your payments it becomes harder and harder to catch up and with that, debt begins to develop. If you have trouble, managing your finances or handling your debt York Credit Services is the company to call. We provide a variety of financial management services to help you manage debt budget and plan your finances. We have a team of professional credit counselors who will help you in the process to being debt-free and improving your financial status.
If you’re struggling to get out of debt, your bank, credit union or finance company may offer you a debt consolidation loan. Before you take the loan, educate yourself on how this form of financing works. A debt consolidation loan can allow you to pay off high-interest debts and remain with a single monthly payment. The ability to get rid of multiple creditors and only remain with a single payment that you need to tackle each month is what makes a debt consolidation loan an excellent option for most people.
Benefits of taking a debt consolidation loan
If a Mississauga bank offers you a debt consolidation loan, chances are that you’ll be given the financing with lower interest rates. Low-interest rates mean that you save money in the long run. You may be able to pay off all your debt within 3 to 5 years after taking a debt consolidation loan. Most financial institutions will only give this type of loan to individuals with a good credit rating. If your credit score is low, you may be asked to provide collateral in order for your loan to be approved.
Your journey to financial freedom may begin when you take a second mortgage. Refinancing a mortgage would be a great option to consolidate your debt. This is simply taking a loan based on the portion of the home equity that you’ve gathered. The credit company or bank will look at several factors before they qualify you for a second mortgage. For instance, the bank will look at whether you’ve gathered enough equity in your home as well as your credit score to determine how much you qualify for when taking up this second mortgage.
Advantages of second mortgages
Getting a second mortgage certainly has its advantages. To begin with, you’re likely to get low-interest rates which gives you more flexible payment arrangements. With more flexible payments, it will be easier to fulfill your financial obligations and get out of debt fast. However, setting up a second mortgage can be extremely costly. This is due to the additional mortgage fees that are usually charged by banks on setting up this loan. There’s also the risk of losing your home if you default. That’s why you must ensure that the payment arrangement is something you can manage once the loan is approved.
Another consolidation option is to apply for a secured or unsecured overdraft line of credit. These lines of credit are often given by banks to help individuals make emergency payments when their account balance is running low. This helps them to avoid missed payments by accessing funds at very low-interest rates. With a line of credit, you can clear high-interest credit card debt and pay off the credit at your own pace.
Drawbacks of overdraft lines of credit
To begin with, you must pay interest on all the money that you borrow. The overdraft line of credit is certainly not free. The bank is likely to charge a fee every time you use it. This means that the more you use it, the more it’s likely to cost you. Additionally, there’s usually no limit as to the number of times you can use the overdraft line of credit. Some individuals end up using it too much and eventually closing their accounts. You’ll find yourself borrowing money and spending it on unnecessary expenses. If you haven’t adopted new financial habits, an overdraft line of credit will only put you into further debt.
A balance transfer on your credit cards is also another type of debt consolidation. They simply work by shifting credit card dent from one or multiple cards to another. The main goal is to get a lower interest rate and pay off many other loans. By using credit card balance transfers you can tackle most of your credit card debts and save money on high-interest rates. It gives you a more affordable option to pay off your credit card debt every month.
Most banks will offer an introductory rate for certain credit cards. This allows you to transfer all your other credit cards with balances on them to that one card which you can pay for at lower fees initially. Keep in mind that the introductory rates normally lapse after a certain period which means that you may go back to paying higher monthly fees. It’s important to calculate how much you’re paying initially and know how that will change once the promotional period is over. This will allow you to budget for the credit card payments in advance. Your credit counselor can assist by reviewing all available options and recommending the most ideal one based on your financial situation.
A credit counselor can help you consolidate all your unsecured debts into one manageable payment that you make each month. With a debt management plan, you can pay very low- interest rates or none. However, you will be required to pay the credit counselor directly who will then forward the payments to your respective creditors until all your debt is repaid.
Benefits of debt management plans
There are several benefits of entering a debt management plan. To start with, you only make one monthly payment which means you won’t have to juggle with numerous debt payments with different terms regularly. You can negotiate with your creditors to have your interest charges significantly lower or eliminate them altogether. Additionally, a debt management plan provides a clear structure on how to repay your debt. It also gives you a timeline to pay off your debt. With a debt management plan, you get expert advice from a credit counselor who provides you with tips and insights to become debt-free. The credit counselors provide support and advocacy for their clients. They also represent you by preparing a good proposal so that you get the best possible terms from your creditors.
Credit counseling involves speaking to a professional credit counselor who can provide sound professional advice on financial matters. When you meet with the credit counselor expect them to ask you a lot of information about your current debts, outstanding payments, income budgets and expenditures and so on. It is important to be completely honest with the credit counselor so they can advise accordingly based on your individual financial situation. Our credit counselors operate ethically and honestly and will ensure that all information shared during these sessions will be kept confidential. The credit counseling process aims to cover the following main points:
What is your current financial challenge?
How did you end up in this situation in the first place?
What trouble are you having making your monthly payments?
What payments are outstanding and for how long?
What do you need to eliminate this outstanding payments?
Once you and the credit counselor have identified the areas of challenge, the next step would be to choose a suitable debt consolidation loan to repay your creditors. We can contact the creditors and negotiate for a full payment and waiver of penalties and late payment fees. A lot of creditors will agree to full payment of outstanding loans given that the debtor has financial challenges and has not been able to make the monthly payments. The full amount that you need to be pay to all the creditors together is what you need to take out in the debt consolidation loan.
When choosing a suitable debt consolidation loan, we aim to find a loan with low interest rates affordable monthly payments based on your current income and a suitable long time. In some situations when your credit is good, you can apply for a 0% interest rate credit card to pay off unsecured loans. This is really advisable when the outstanding loan amount is small.
However if you have a huge debt, personal loan would be most suitable to use for debt consolidation. The personal loan allows you to pay your debt over time. We will calculate the personal loan monthly payment rate according to your income and therefore it should be an amount that you are able to comfortably pay at the end of the month. Additionally the personal loan that you take may improve your credit score by moving the bad credit card debt to the installment loan column.
Our Mississauga debt relief specialist will work closely with you to find the right debt consolidation loan. At this point you will need to create a budget plan that you’ll use over the next couple of months or years in order to finance these payments. The budget plan will guide how you spend your monthly income allowing you to make savings repay the personal loan and meet your expenditure needs.
The debt consolidation process depends a lot on your personal decision to make a change in your life. We cannot ignore that you are responsible for allowing your finances to get to this point. You will need to make some lifestyle changes in order to accommodate the debt consolidation plan. One of the things you need to do is to avoid spending on credit so you do not increase your number of creditors. You will also need to stay within budget for a couple of months until your financial situation is stable. Avoid excessive spending on luxury items that you do not really need until you’re able to finance all your payments comfortably. Saving is also an important part of recovering from debt. Our credit counseling process is also a good place to learn about the saving culture and making sound financial decisions.