Consolidating credit card debt into one loan
Here's what you need to know about consolidating accounts through a debt management plan with an agency. Instead, they have preset arrangements with most financial institutions, many of which lower interest rates and fees, so more of your payment goes toward the balance rather than finance charges. With something as precious as your finances, be exceedingly careful about who you work with.
Their debt management plans can help you get back on track -- but they can also be unnecessary and even detrimental when done through a poorly run organization or for the wrong reasons. These agencies do not make loans, nor do they settle debts.
With a DMP, you're paying 100 percent of your obligations, which is quite different from discharging them in a bankruptcy or settling the debt.
Pay more to the accounts with the highest interest rate, and when one is paid off, add the payment the next most expensive debt.
Below are the most common reasons: To learn more about what debt consolidation is and how it works in Canada, click here.
To consolidate all of your debts, your first option would typically be to approach your bank or credit union and see if they can help you.
On the other hand, most people who go into a DMP do so because they're already stumbling and missing payments, so making timely and consistent payments through the service can help their reports.
Clearly, consolidating debts through a debt management plan with credit counseling agency can be helpful, but you may also be able to achieve the same results on your own. Suspend charging and request rate reductions from each of your creditors.
If you have a mortgage, you might look to see if you have enough equity in your home to consolidate your debt with your mortgage.