3 Factors to Consider When Exploring Debt Consolidation Services

December 8, 2017

Debt consolidation can be a life-saver, particularly when facing a potential Bankruptcy. However, while debt consolidation services can often present a feasible solution for managing debt, it’s not always the best choice for every financial situation.

At Fuller Landau Debt Solutions, we’re here to help you find the best option for resolving your personal debt. There are a number of factors to be considered, before deciding if debt consolidation services are right for you:

What Kind of Debt and Interest Rates Are We Dealing With?

Debt consolidation is most often used to deal with debts that need to be paid off quickly. Debts with high interest rates, such as credit cards, are often well-suited to debt consolidation, but other types of debt, such as low-interest car loans, may require different repayment options.

Additionally, some debts such as certain mortgage agreements, are designed to be repaid slowly over a period, and may carry stiff penalties for early repayment.

What Rates Will The Lenders Offer?

There are a number of factors, such as the current state of your credit rating, which may have a major impact on the interest rates you can get from a debt consolidation loan. Ideally, a consolidation debt should save you money in the long run—if your consolidation interest rates are higher than your debt interest rates, then consolidation is not the best option.

Are There Any Other Fees or Stipulations Attached to the Consolidation Loan?

Debt consolidation loans often have fees associated with them. These fees have to be weighed against the interest rates to make sure that your consolidation loan agreement is still working in your favour.

Consolidation loans may also have stipulations written into them that require you to pay over an extended period of time. Unfortunately, this eliminates your option to pay off your debt immediately, thereby preventing the debt from accumulating further interest.

We’ll Help You Decide if Debt Consolidation is Right for You.

When you speak with one of our experienced Licensed Insolvency Trustees, we’ll take your unique situation into account to find the debt solution that is best for YOU. Together, we’ll explore all of your options, including debt consolidation, credit counselling, Consumer Proposals, and Bankruptcy. With offices in Toronto and Hamilton, the Fuller Landau Debt Solutions team is here to help you get a fresh start and lead a FULLER life. If you’d like to sit down for a free consultation, contact us today, and follow us on Facebook, LinkedIn, or Google+.