Debt Management Program interest rates are lower than credit card interest rates and in some cases, they are completely removed. This is one advantage of working with a reputable non-profit credit counseling organization, like the Credit Counselling Society. Creditors will accept your DMP and allow you to make monthly payments to eliminate your debt. If you choose a for-profit credit counselling company, the same scenario may not happen.
Debt Consolidation Blog Articles
By Debra Pangestu
Keeping up with different debt obligations is a common struggle for many Canadians, and if you’re trying to get your head above water, sometimes understanding how debt consolidation works could be the first step towards rebuilding your finances.
Credit counselling services and consolidated debt management programs will help you avoid bankruptcy and achieve total debt freedom.
If you've been declined for a debt consolidation loan and are struggling to keep up with your bills, don't let stress and worry get to you. A Canadian non-profit service can help you.
Put simply, debt consolidation can be broken up into two words in order to give the most accurate definition. To “consolidate” means to “put things together.” In terms of consolidating debt, it means taking two or more separate debts and putting them together into one new debt. There are different ways of consolidating debt. Some require borrowing more money; others use money you’ve already got to pay back part of what you owe.
Choosing the right alternative out of the many debt consolidation options can be difficult, especially given how stressful it is to deal with debt to begin with. You want more than just a quick-fix. You need a debt solution that will help you deal with the debt you have right now, as well as help you stay out of debt in the future. Nothing would be worse than spending a few years making payments on a consolidation program now, only to struggle again a few years later with the same problem.
You have heard the term, but may still wonder what is a debt consolidation loan exactly? A debt consolidation loan is when you borrow money to pay off other debts. For instance, you may owe money on a few different credit cards, on your overdraft or even for a personal loan. If you qualify for a consolidation loan, your lender will give you the loan, on the condition that the money gets used to pay off your other debts. They will often even process those payments for you. In return, you agree to close those accounts (e.g.
To get by during a difficult time, or to make ends meet, people rely on many different types of credit. They use their line of credit to pay off their credit cards or they use their overdraft to pay for living expenses. Other times, someone will refinance their mortgage to pay off other debts, like their car loan, line of credit or government debt. If someone has been turned down for a loan by their bank, they might have even used expensive payday loans to get by.
Is this method of consolidating debts a good idea?
If you are considering using a credit card as a debt consolidation option here is what you need to know. A low interest credit card often comes with strings attached, so be very cautious if you’re considering applying for a new credit card to consolidate debt. Read and understand the fine print to make sure that you are aware of all of the terms and conditions before you do this.