Consolidating your debt canada
Here’s why you should skip debt consolidation and opt instead to follow a plan that helps you actually win with money: The debt consolidation loan interest rate is usually set at the discretion of the lender or creditor and depends on your past payment behavior and credit score.Even if you qualify for a loan with low interest, there’s no guarantee the rate will stay low.You’re in deep with credit cards, student loan payments and car loans.Minimum monthly payments aren’t doing the trick to help nix your debt, and you’re flippin’ scared.Something has to change, and you’re considering debt consolidation because of the allure of one easy payment and the promise of lower interest rates. But the truth is debt consolidation loans and debt settlement companies suck even more. In fact, you end up paying more and staying in debt longer because of so-called consolidation.Get the facts before you consolidate your debt or work with a settlement company.The debt includes a two-year loan for ,000 at 12% and a four-year loan for ,000 at 10%.Your monthly payment on the first loan is 7, and the payment on the second is 3. If you make monthly payments on them, you will be out of debt in 41 months and have paid a total of ,821.
But here’s the downside: It will now take you 58 months to pay off the loan.Some companies know holiday shoppers who don’t stick to a budget tend to overspend then panic when the bills start coming in.And other loan companies will hook you with a low interest rate then inflate the interest rate over time, leaving you with more debt! Your goal should be to get out of debt as fast as you can!To do that, you have to change the way you view debt!Dave says, "Personal finance is 80% behavior and only 20% head knowledge." Even though your choices landed you in a pile of debt, you have the power to work your way out! The solution isn’t a quick fix, and it won’t come in the form of a better interest rate, another loan or debt settlement.