As the cost of living continues to increase, it’s unsurprising that many Canadians find themselves struggling to balance their budgets. Juggling work, families, household responsibilities, and social commitments can take its toll, especially on your finances. It’s not uncommon to find yourself in debt — whether it’s credit card payments, unexpected medical or household expenses, student loans, or a combination of each.
That’s where the importance of debt consolidation comes into play. This strategy is designed to help you pay off several smaller debts in favour of one lump sum payment that is often easier to hold yourself accountable for — rather than balancing multiple payments from multiple creditors.
If you haven’t done any research or looked into debt consolidation, you may have questions about the overall goal and what to look for when looking for online loans in Canada.
We’ll take you through those questions and provide the information you need to make an informed decision regarding your finances.
What is the goal of debt consolidation?
Simply put, the goal of debt consolidation is to streamline your payments by taking out one lump sum of money to pay off multiple creditors at once. This strategy can help those struggling to make multiple payments or borrowers who are unsure which payments should get priority over the others.
What are the benefits of debt consolidation?
There are certain benefits that come from implementing debt consolidation into your finances. First, it simplifies the payment process, which can be essential for borrowers trying to juggle a busy professional and personal life. Second, it can save borrowers money by using the lump sum they’ve received from an alternative lender to pay off any high-interest debts if they’ve been approved for a low-interest debt consolidation loan. Lastly, if you have received a low-interest loan and are able to make consistent payments, it can speed up the overall process and help you find financial freedom in a much shorter time frame.
How to make debt consolidation work for you
Like any aspect of finances, everyone’s relationship with debt is unique. If you decide that debt consolidation is for you, you can tailor it to meet your needs. When you approach alternative online lenders, many will allow you to choose the amount you need so you never have to worry about paying back more than you can afford.
You also have the freedom to pay down your debts as you see fit — whether that means paying off high-interest debts or working on your smaller payments first. The end result should leave you feeling more in control of your debt so that you can continue to take the necessary steps to clear it entirely.
Conclusion
If you’re struggling with debt, it’s important to know that many Canadians face the same obstacles as you, and there are plenty of resources available, including debt consolidation. Research is key when it comes to deciding if this strategy will work for your situation and speaking with lenders who share your desire to find your financial footing once again.
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