Debt Consolidation Can Help You Manage the Unmanageable

Canadians get into debt for any number of reasons: a lost job, unexpected expenses, a divorce, overspending, even saving too little. One of the best ways to get a handle on out-of-control expenses is through debt consolidation .

Canadians Going Deeper in Debt

If you’re in over your head with unmanageable debt, you’re not alone; nearly half of all Canadian credit card holders carry credit card debt. On top of that, one in three people do not pay off their credit card bill every month.1

According to the most recent data, the average debt balance for a Canadian consumer (excluding mortgages) is $21,028. In 2014, the average debt balance in Canada was $20,880.2

Part of the reason Canadians are getting further into debt is the ultra-low interest rate environment. For example, low rates on a line of credit, which typically has floating interest rates, make it cheaper to borrow.

Things can go from bad to worse when you just pay the minimum due on a credit card or line of credit. This can lead to a worrying cycle of unmanageable debt.

Hike in Interest Rates Could Hurt Canadians Even More

Canadian interest rates have been at historic lows for years, leading many Canadians to get complacent about the eventual hike in interest rates. Even those with manageable debt levels could feel stretched when interest rates start climbing higher.

In addition to personal debt, many Canadians will struggle to make mortgage payments when rate hikes kick in. One third of homeowners will have trouble making mortgage payments if their monthly payments increase by just 10%. A further 15% could not handle any increase in payment.3 This is an indication that home buyers weren’t given the best mortgage advice when they purchased their home.

Average Canadian Won’t Be Debt-Free Until Age 56

On average, Canadians don’t expect to be debt-free until they are 56 years old, while 21% will carry debt until they are over 65. Over half of Canadians aged 65 and older say they carry some form of debt, with credit card debt and lines of credit being the most common types. In addition, 13% of Canadians say they will never be debt-free.4

But how do you pay off your debt? And where do you start if you have multiple sources of debt?

Manage Your Debt Through Debt Consolidation

If you are overwhelmed with unmanageable debts, it might make sense to merge them all into one loan. This is what debt consolidation is.

You can consolidate your debt by taking out an equity home mortgage or you can refinance your mortgage . Debt consolidation helps simplify finances so you only have one monthly payment. On top of that, the interest rate on debt consolidation is usually much lower than other loan interest charges.

Canadalend.com: The Nation’s Leader in Debt Consolidation

If you’re feeling overwhelmed by monthly bills and mounting interest charges, you might want to consider consolidating your debts. If you’re looking for debt consolidation services in Ottawa, there’s no better place to turn than Canadalend.com.

The licensed, independent agents at Canadalend.com are dedicated to helping you secure the debt consolidation plan best designed to fit your financial and lifestyle needs. Whereas large banks and other lending institutions will only try and sell you their financial products, Canadalend.com works for you.

If you find yourself in debt and are wondering if a debt consolidation loan is right for you, contact Canadalend.com or apply online and a mortgage specialist will help set up an appointment for a personal consultation to review your options at your earliest convenience.

As the leading debt consolidation service provider in Toronto, Canadalend.com will, in most cases, get your debt consolidation or refinancing approved in just 24 hours.

Sources:

Loney, H., “Nearly half of Canadians have credit card debt, report shows — Here’s how to get rid of it,” Global News web site, February 10, 2015; http://globalnews.ca/news/1822207/nearly-half-of-canadians-have-credit-card-debt-report-shows-heres-how-to-get-rid-of-it/.

“Consumer debt rising, but Canadians have a better handle on it,” CBC web site, August 26, 2015; http://www.cbc.ca/news/business/consumer-debt-rising-but-canadians-have-a-better-handle-on-it-1.3204568.

“Four in ten homeowners made an extra payment on their mortgage in the past year, Manulife Bank of Canada Debt Survey Shows,” Manulife Bank web site, June 16, 2015; https://www.manulifebank.ca/wps/wcm/connect/d96abe3b-e6d3-4d03-892d-931ce22e61ed/Spring+2015+Debt+Survey+News+Release+-+FINAL.pdf?MOD=AJPERES&CACHEID=d96abe3b-e6d3-4d03-892d-931ce22e61ed.

“Debt Freedom? Canadians expect to be debt free by age 56: CIBC Poll,” Yahoo! Finance, July 27, 2015; https://ca.finance.yahoo.com/news/debt-freedom-canadians-expect-debt-080000526.html.