What is Debt Consolidation Service? The Basics:
Debt consolidation is when a new loan is taken to repay older debts and other liabilities. Through debt consolidation, multiple debts (like student loans, credit card debts, and personal loans) are combined into a single, more significant debt such as a loan, usually with more favourable payoff terms like lower interest rates, lower monthly payments, or both. But it is important to note that debt consolidation loans do not erase the original debts. They are merely transferred to a different lender or type of loan.
Types of Debt Consolidation Services in Surrey:
Regarding debt consolidation loan Surrey, there are two options, both of which aim to reduce unsecured debts using one payment process. One is the debt consolidation loan which, like other credit products, is offered by various lenders easily if the consumer is within borrowing regulations. In this type of loan, the customer needs to be approved for a lump sum of money which is then used to pay off the debts in one go, thus leaving the customer with only a single payment schedule and monthly instalment to follow. However, a good credit score is a must for ensuring this. The second type is called a debt consolidation program which comes in handy when the customer does not qualify for the first type or if they are not ready to take the liability that comes with debt consolidation loans. Instead of applying with a lender, a credit counsellor is hired to initiate the program. The counsellor can guide the process and negotiate with lenders on the customer’s behalf. The monthly payment is to be done to the counsellor, who sends that to the lenders once the program is accepted.
Benefits of Debt Consolidation Services:
There are various reasons why this type of service has been gaining so much popularity in recent years, especially in places like Surrey and Vancouver, where the cost of living is very high. Some of them are:
- Getting a lower interest rate on the new loan.
- Better debt management is possible by consolidating all the existing debts into one.
- Credit scores can be improved if payments are made on time.
- Debts can be paid off faster.
- Instead of many payments to different lenders, only one monthly payment is to be made.
Debt Consolidation Services in Surrey, Vancouver, Canada:
With the rising cost of housing in Canada, flat income increases for the working, lower and middle class, which results in financial distress. In Vancouver, Canada, debt consolidation is quite popular, but people are confused about which scheme will suit them best. Every year, thousands of Canadians use tactics like debt consolidation and consumer proposals to get out of serious trouble rather than declare bankruptcy. This option is suitable for credit cards, public utilities, or other consumer loans, excluding mortgages.
Vancouver’s debt statistics
Since 2009, bankruptcy filings have declined in Vancouver. This, however, does not necessarily mean that Canadians have improved their financial security. Debt-to-asset ratio is a metric that is measured by dividing total family debt by total family assets. One study has shown that a higher debt-to-asset ratio was associated with a greater probability of missing non-mortgage payments. Families with a debt-to-asset ratio above 0.50 had a 13% probability of missing a non-mortgage payment. In comparison, this probability was 12% for those with a ratio above 0.25 and up to 0.50 and 8% for families with a ratio equal to or below 0.25.
Thus debt consolidation is a great solution to eliminate the burden of several loan payments and lift the weight of stress and money worries from one’s shoulders.
If you are looking for affordable debt consolidation services, look no further. Debtconsolidationbc offers a range of debt consolidation services and has an experienced base of financial experts to help you walk out of the debt trap.