There are any number of reasons why homeowners in Ontario might get into debt. Debt consolidation is a great way to deal with the day-to-day financial stress and make your debt more manageable.

How to Manage Debt in Ontario?

If you have unmanageable debt and also own a home, you may want to merge it together into one loan. There are two ways you can consolidate your debt: you can take out an equity home mortgage loan, which allows you to consolidate several unmanageable debts, or you can refinance your mortgage into a single monthly payment with one interest rate.

Consolidating debt by adding it to your mortgage is one of the easiest ways to get a handle on expenses. If you have a mortgage, it might be a good idea to see if you have enough equity in your home to consolidate your debts; the mortgage interest rate with refinancing is usually significantly lower than other loan interest charges. On top of that, mortgages can be amortized over 25 years, which means you can arrange lower monthly payments.

If you do not have enough equity in your home, you might want to look at a debt consolidation loan. Because the loan is not secured by an asset like a home or car that is paid off, you will not be able to secure as much. Banks and mortgage lending institutions typically only lend people around 10% of their net worth (assets minus debts) on an unsecured basis.

Debt Consolidation with Bad Credit

It’s one thing to get a consolidation loan on your debt if you have a secured asset such as a home, but what if you also have bad credit? This can make it difficult to get a debt consolidation loan, but there are a number of private mortgage lenders who specialize in helping those with bad credit.

Consolidating your debt can actually help improve your credit rating, as your credit score changes in step with your financial situation. If you pay your bills on time and continue to pay your debt down, your credit score will improve.

Advantages of Consolidating Debt

It’s important to have all the facts before you decide to consolidate your debt. One of the main advantages of debt consolidation means having just one monthly payment; this makes it easier for homeowners to keep track of your debt and also means reduced interest rates. And if you make your monthly payments on your debt consolidation loan, there is a good chance your credit rating will actually improve.

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


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