When you find yourself struggling to pay back a loan, the most important and first step to take is to know more about your debt relief options. A consumer proposal or debt consolidation might be a better option for you, your family, and your creditors. It can be an effective debt consolidation method in cities like Calgary, Alberta, and Lloydminster.

What is Debt Consolidation?

One of the most popular ways to reduce debt is Debt consolidation. Debt consolidation means increasing your leverage with the primary target of lowering your interest rate. This process involves taking out one big loan so that one can pay off many small loans. This will help you to get out of debt much faster since your new loan will have a much lower interest rate.

Reasons to choose Debt Consolidation over Consumer Proposal

Debt consolidation does come with certain advantages if you’re able to pay down your debts with a reduced rate of interest. It can take various forms. It can combine several high-interest credit card accounts from a lower-interest loan to a secured loan backed by real estate.

You can simplify your repayments:

One of the most important advantages of debt consolidation is that your repayments are simplified. You can now stop making several payments when you combine various debts into one, and you only have to pay once a month. As a result, this significantly minimizes the number of late or missed payment occurrences.

Offers you Lower Interest Rates:

Unsecured debts like credit cards and personal loans could charge you a high-interest rate. This can add significantly to the debt you need to pay each month. Hence by combining multiple debts into one, you can pay lower interest in the long run, especially when you can get a debt consolidation loan at low interest.

You will face Less Stress:

It would be best to worry about fewer repayments; hence, your finances are less stressed. Consolidating all your debts into one single debt makes it easier to manage and repay them comfortably.

Affordability:

If one can afford the payments and have good enough credit to get a debt consolidation loan, then a debt consolidation loan is a better option than a consumer proposal.

Conclusion

There is clearly a reason why 39.7% of the high-score borrowers opted for consolidating their loans in a survey. Debt can feel like an isolating experience, but you don’t need to worry and handle it alone. You can always consult an expert to help you choose which debt relief option best suits your unique situation. You can appoint a Credit 720 counselor who will always work in your best interest and ensure that your Creditor treats you fairly. Home appointments are also available for Calgary, Edmonton, and Surrey.