When there are multiple debts, it can be difficult to keep a track of them. Losing track means being behind on repayment. This can increase the interest rate. When there are multiple debts to take care of, it is suggested to undergo debt consolidation. There are various ways to go about it and York Credit Services will guide you through that process. You can read their reviews here: https://www.yelp.ca/biz/york-credit-services-toronto. Following are some of the debt consolidation options that can be considered.
Debt Consolidation Loan
One of the ways to consolidate the debt is by getting a loan from a bank, credit union or finance company. When you take a loan, you use the money to pay all the outstanding debt. All the loan is converted to a single debt. Now you only have to worry about paying back this loan. It will help you to save money as the interest rate will be lower. This debt can be paid off within two to five years. However, this option is only available to those who have some security to offer and have a good credit rating. If you want to opt for an unsecured loan, there might be a drastic increase in the interest rate.
Second Mortgage
The first mortgage is the loan you’ve taken for your home. After you start paying back the mortgage, you begin to own equity in your home. The more you have paid off, the more equity you have. A second mortgage is refinancing the mortgage or using your equity. This mortgage will allow you to consolidate the debt. It is a great option as the interest rate is generally lower, and the banks tend to be flexible with the payment arrangement. However, if there isn’t enough equity over the house you can’t opt for this type of debt consolidation. You could choose to pay a fee for setting up the second mortgage, but it can make the process more expensive. York Credit Services will guide you through the process.
Debt Management Program
It can be daunting to keep a track of all the payments you need to make. Undergoing the credit counselling process with York Credit Services can help you to create a program to manage the debt. They will work with you to create a plan that will be best suited. On your behalf, they will negotiate with the creditors on how the debt can be consolidated. The debt management program by York Credit Services allows you to pay off the credit within 4 years. They charge a low to no interest rate. Once the program is over, it could impact the credit score negatively for the next two years. The process of credit counselling might even seem overwhelming. You must have an expert guiding you through the process. During the counselling, the experts will explain all the available options. They will work to find out the best option that will help to relieve you of the debt.
