You’ve probably heard someone say that the borrower is slave to the lender. If you’re currently struggling with debt, have you ever thought about how true this is? Owing money to someone is constantly in the back of your mind. Every dollar that comes in comes with a nagging reminder that it’s not really yours – that you owe it to someone else.
Every purchase you make might also set off an alarm bell, telling you that it really belongs to the person or institution who you’re in debt to.
The word slave might be a bit melodramatic, but it’s not that far from the truth. It’s a terrible feeling to be in that kind of debt to someone, so let’s talk about how to get out.
If you’re truly drowning in debt, be it credit cards, student loans, lines of credit, car loans, or some combination of all of these, being pulled in so many different directions is just as stressful as the actual amount you owe.
That’s why debt consolidation can be a good option to help deal with everything.
Debt consolidation is the process of borrowing enough money to pay back all of your debts at once. This loan is then your only debt that you’ll focus on paying down. At first it may seem like you’re just moving money around, but there are several benefits:
- Lower monthly payment – rather than a bunch of different monthly minimum payments (which you may not even be able to afford), you’ll be able to negotiate for a single payment that works well with your income and budget. This alone can take a lot of the stress off of your debt. Of course a lower monthly payment means it will also take longer to pay off your debts. There are many calculators available to help you see what your options are. Check out http://debt.ca for some great ones.
- Lower interest rate – some debt, such as credit card debt can carry an astonishingly high interest rate. Through debt consolidation you may be able to negotiate for an interest rate that is, on average, lower than what you were paying before.
- Less pressure – if you’ve been getting harassed by creditors, debt consolidation will stop all of that. Debt consolidation Ontario or any other province in Canada will speak directly to your creditors and arrange payback in full. You’ll only owe one institution, and they’ll be the ones setting up your payments to make sure you don’t fall behind again.
There are some dangers to debt consolidation. If it was bad habits that got you to this point, doing what seems like clearing out your debts might lead you to make the same mistakes again. For example, if your credit card is maxed out and all of a sudden it’s cleared, you might be tempted to make more purchases with it. If you think this might happen, debt consolidation will only serve to drive you further into debt.