Pros And Cons Of Consolidating Your Debts

| October 31, 2014 | 0 Comments


When we have overspent, or lived beyond our means, it is really easy to bury our heads in the sand. There are many excuses for this happening, including; “the cost of living is just too high for me to live on an average wage”, “the retailers manipulated me into that impulse buy”, and the all time favourite “the bank put too high a limit on my credit card”. The truth is, you spent money you didn’t have, and now the bank wants it back. You can’t place all the blame on the bank for letting you borrow that amount. Can you honestly say the entire amount borrowed was spent on absolute essentials? We’ve all fallen for it and suffered from it.

Once we have accepted we have some debt, and we really don’t stand much chance of paying it back, it’s time to get help. No matter how much we strip our budget back, we can’t make the repayments and afford to eat. We are in financial trouble. We are worried, depressed, stressed, and hearing from debt collectors.

Before you become ill or repossessed, it’s time to find someone helpful. If you have debts with high interest, you can look at two ways of reducing the rate while you are trying to pay it back. We’ve detailed the pros and cons of each:

Debt consolidation. Using debt consolidation in Vancouver, you can remortgage your house to take a loan that will cover the rest of your debts. Pros – One loan from one lender at a substantially lower interest rate. The total monthly repayment is likely to be substantially less than the total of all your other minimum repayment commitments. Your loan agreement can be switched to a cheaper lender after a minimum term. Cons – you may be tempted to borrow beyond just the debt amount. You are securing this loan against your house that you could lose if you don’t keep up repayments. You are in debt with this lender for years to pay it off, and committed to them for a minimum period. You will be charged a substantial fee for arranging the loan, so your total debt will be higher.

Category: Debt

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