Choosing Debt Consolidation Loan Options Wisely

There are many types of debt consolidation loans to choose from, but one might be better than the other for you depending on your specific circumstances. Read on below to help you choose the best one for your needs!

But First, Why Consolidate Debt?

Paying debt can be very difficult, more so when you have to remember each one and make sure that you pay each one’s monthly payment before their due dates. Most loans also have high interest rates, so paying them off often means just trying to keep up with the minimum payment each month.

The beauty of debt consolidation is that it allows you to manage your debts easier. When you take a loan to pay off high-interest debts, you end up having just one debt to pay in the future!

Debt consolidation helps you get rid of the trouble of having multiple loan bills. Not only that, but some debt consolidation options help you save in the long run because of their relatively low interest rate.

Below are 4 popular types of debt consolidation loans that you can use to consolidate your debts.

Personal Loan

You can consolidate your debts with a personal loan if it is an amount that is large enough to cover your debts. Because a personal loan is an unsecured type of loan, you can expect to pay higher interest than other loans in this list. You will also have to make sure that you can afford the fixed payments.

A personal loan might be very difficult to get if your credit rating isn’t impeccable. Note too that because this is a high-interest loan, there is a huge possibility that you won’t be saving money in the long run.

Credit Card Balance Transfers

Credit card balance transfers work because this type of loan usually have a low interest rate, so you’ll be able to save quite a bit. The downside is that the low interest rate is usually for a certain length of time only. This means that any savings you’ll be able to get won’t be very substantial.

Note that using this method to consolidate debt can further cause your credit rating to plummet so be very careful and make sure that you read all details before signing up for a credit card balance transfe

Debt Consolidation Loans

Debt consolidation loans are loans that are offered by credit unions and banks specifically for the consolidation of debt. Their terms can vary widely but a key detail to watch out for is a longer repayment timeline because that means you’ll end up paying a lot more despite lower monthly payments.

Home Equity Loans

A home equity loan is a loan you can take using the equity you’ve built up in your home as collateral. Because this is a secured loan, you can enjoy a lower interest rate using this than using the other types of debt consolidation loans listed here. You just have to be very careful and make sure that you’ll be able to pay because choosing this means putting your home on the line. You need to be discerning and really look for a lender that’s not out to take your home.

Ready to apply for a loan to help you consolidate debt? Talk to us at Homebase Mortgages to avail of our professional mortgage services that can help you manage your  finances better!

5 Steps to Consolidate Debt

Waiting for magic and hoping your debts and bills will go away won’t happen without a little help from you. Know that although you can’t really make debt disappear, you have the power to make it easier to pay via debt consolidation.

Why Consolidate Debt?

Managing several debts with various interest rates and due dates can be very stressful. Consolidating your debts into one helps you keep track of payments faster and even opt for a lower overall interest rate. Yes, the initial step of documenting what amounts you owe and to whom can be daunting, but the long term benefits outweigh the initial effort you have to put in.

Consolidating debts is a big challenge for most people, that’s why we listed the 5 steps that you can take with the help of a financial expert to make things more manageable for you. Read about them below!

Get to Organizing

Find out what you owe and to whom. This allows you to have a better awareness of your credit status and credit rating, the crucial numbers that you’ll help improve as you pay off your debts after consolidation. Note that fees will usually be involved in this stage.

Start with contacting your credit bureaus and move to taking a detailed inventory of your debts. Take small steps. Don’t forget to keep accurate records more so when you start paying everything off.

Find Available Debt Consolidation Options for You

Depending on your area, you may seek the help of mortgage brokers to guide you in the debt consolidation process. Some options may be better for you compared to other means based on your needs and means. Private lenders, banks, or credit unions may all have solutions for you, the trick is finding the best one to avoid future problems.

Apply for a Loan

Once you already know how much you need and have picked a lender for debt consolidation, the next hurdle is actually getting approved for it. Knowing how the process work counts the most in terms of getting approved.

Make sure that you’ll be applying for a loan that will cover all your debts to avoid future issues. Choose the one with payment terms that you can afford. The last thing you want is to end up in worse financial status after this. Get a mortgage broker to go over your list and the payment terms to ensure you’re not missing anything important.

Bounce Back

Bouncing back can mean the actual process of paying for your debts or reapplying for a loan if you got turned down. If your application wasn’t approved, then note your mistakes and don’t be afraid to ask about what went wrong.

Consolidate Your Debt

Once you get approved, be sure to pay off your existing debts and use any extra money to pay the loan back. Remember that paying your debt on time will ensure you incur only the bare minimum of interest and help improve your credit rating and financial record.

Need the help of a mortgage broker so you can consolidate your debts? Contact us today! We’ll be happy to assist you towards your goal.

Consolidate Your Debts with a Home Equity Loan

Having a lot of loans can be a pain to keep tab of when it comes to making sure that you’re paying them off before each of their monthly due dates; not to mention that each loan will have dizzying interest rates that will keep on eating on your finances if the loans are not paid off as soon as possible. This is why consolidating debt is an attractive aspect of debt management.

Managing your finances will be a lot easier when your debts are consolidated. Doing so will mean that you will have fewer things to mind when it comes to bills.

The thing is, consolidating debts usually means taking out another loan, using the funds from that to pay off your other debts, and ending up with just one debt to mind. Sounds easy but can be a bigger problem if you take the wrong kind of loan. You better do your research and know which type of loan is the most advantageous for your financial situation.

Home Equity Loan to help You Consolidate Debts

Taking a home equity loan can be a great solution for managing your debts. It is a type of mortgage loan that uses your home’s equity as collateral. The amount that you can borrow from this loan is determined by a percentage of your home’s equity and the terms of the mortgage company or private lender that will be providing you with the loan.

Because a home equity loan is a type of mortgage, the interest rates will be far better than other types of loans that you can get from a bank or other lenders such as a credit card, a personal loan, or an unsecured debt.

Will It Be Smart to Use a Home Equity Loan to Consolidate Debt?

As long as you can pay off the minimum payments set by the lender, you’re not in a hurry to sell your home anytime soon, and you’ve got considerable debts with huge interest rates that will benefit greatly from being converted into just one loan, then the answer is yes.

Think about it, if the interest rates of your existing loans are so expensive that you’re often simply paying for the interest each billing period, you’re basically throwing money away and will end up paying a total of twice or more the value of your original loan by the time you pay it off. That couldn’t be good. If you use a home equity loan to pay off your current loans, you will still pay some interest, of course, but it will be nowhere near what you are currently paying now.

There is one thing you have to be really sure of before getting a home equity loan. You have to be sure that the terms you agree to will give you a monthly bill that you can afford to pay. Note that failing to pay the minimum amount on time could mean losing your home to the lender. If used correctly, though, a home equity loan can improve your financial position significantly.

Interested in applying for a home equity loan but is not sure how to go about it? Contact us at Homebase Mortgages for professional assistance with your home equity loan application.

8 Benefits of Converting Your Credit Card Debt to a Home Equity Loan

Holding on to debt via a credit card or several credit cards is not really a wise choice because of the sky-high interest rates, not to mention that trying to keep track of payments can be quite a chore if you have a few cards. Credit card debt consolidation by transferring your credit card debts to a home equity loans means that you’ll have fewer debts to manage! Find out what the other benefits are below!

Save Money on Lower Interest Rates

This is by far, perhaps the most convincing reason on why transferring your credit card debt to a home equity loan is a great idea. Credit card interest rates can go between 19% to 28%, depending on how diligent you are when it comes to payments. In comparison, home equity loans would typically have an interest rate that is less than half as that for credit card debts. This can mean a few thousand   of savings per year!

Lower Minimum Payments

Because home equity loans are interest only (for the most part), minimum payments are also significantly lower compared to credit card debts.

Flexible Payments

Home equity loans are pretty fluid in the sense that you can opt to pay just a part of your debt, just pay the minimum, or pay in full if you have extra funds. This enables you to reduce your debt quickly if the opportunity arises and also allows you to just pay what you can when you’re strapped for cash.

Reduce Debt Fast

Because the interest rates are lower and the payments are flexible, you can pay off a home equity loan faster than a credit card loan. This is also partly because more of payments are going towards paying off what you owe and not just going to a bank’s pockets.

Statistically speaking, if you are to pay the same amount to a home equity loan as compared to a credit card debt, you will only have paid 20% of your credit card debt after 5 years whereas that equates to having paid 60-80% of your home equity loan after the same span of time.

Keeping Things Simple

Fewer loans to keep track of means fewer bills and less probability of missing deadlines for payments. One of the beauties of using a home equity loan is debt consolidation.

Credit Score Improvement

When you are able to pay debts on time and keep track of all payments, your credit score is likely to improve. More so, the lower interest rates and being able to pay off the loan sooner can help turn your bad credit to good credit in a shorter span of time.

Easier to Get Than a Personal Loan

Because a home equity loan is backed by your home’s equity, lenders are more apt to grant it because they view it as an investment. This also explains the lower interest rates because home equity loans are viewed as secure investments whereas personal loans are viewed as a risk.

Better Than Another Credit Card

Transferring your current debt to another credit card is one way of reducing your average interest rate, but this will only reduce it by a few percentage points at the most. More so, credit card companies also charge a fee when you transfer your debt from one card to the next so you are not really saving any money in the end.

Want to apply for a home equity loan? Contact your trusted team of Toronto mortgage brokers today and save both time and money in paying off your credit card debt!

Debt Consolidation with a Home Equity Loan

Consolidating debt is something that helps a lot with debt management but not many people are using to their advantage. One way to achieve this is by using home equity loans for debt consolidation; question is, is it right for you?

Getting a home equity loan would be a great way to pay off existing debts by borrowing against the equity of your home. Because it can take care of other loans for you, you will end up having to pay only this one loan and nothing else if used properly. That means only one monthly bill to pay plus other advantages such as a better interest rate and a lower monthly minimum.

How to Consolidate Debt with Equity Loan

Most people have a couple of debts in the form of credit card debts, personal loans, car loans, and the like. These debts often come with high-interest rates that can easily inflate the original loan value should you miss one payment; often leading to you having to pay a few times more than the value of your original loan.

By using equity to take out a lump sum of money to pay off your existing debts, you will free yourself from having to pay those high-interest rates plus save yourself the trouble of having to remember to pay off multiple debt bills each month.

That’s right! By using an equity loan (such as a home equity loan), you’ll be consolidating your debts into one loan with a fixed interest rate that is friendlier on your wallet.

Is a Home Equity Loan Right for Your Debt Consolidation?

Take note that using a home equity loan will result to you reducing the equity you have in your home (because you’re borrowing against it). This means that if you’re planning to resell your home soon, you may not make any profit at all and would be lucky to come out not owing anything after the sale.

On the other hand, if you’re planning on staying in your home for quite some time or permanently, using a home equity loan for debt consolidation is a near-perfect solution for your debt-paying needs because you’ll be saving a lot in interest rates as well as making your life a lot easier by reducing monthly expenses and bills to pay.

Be sure that you take your local real estate market’s condition for consideration before you decide on getting a home equity loan. Home values tend to rise and fall with the market’s cyclical trends so getting a loan at the right time can result in a huge advantage. At the same time, borrowing against your equity at the wrong time can result in you owing more than your home is worth a few years down the road.

Should You Go for It?

Yes! But best if you’re going to keep your home for quite some time or if you’re not intending to make a profit by reselling your property. Yes, too if you think that you’d like lower interest rates and having only a single debt bill to pay monthly instead of several. Make sure you borrow when interest rates are at its lowest and when the timing is right!

Looking for help to get a home equity loan? We can assist you wherever you are in Canada! Simply contact us and tell us about your specific needs!


10 Reasons Why Transferring Your Credit Card Debt to a Home Equity Loan Is A Great Idea

You may be curious why some people are converting their credit card debt to a home equity loan. Why would they do that? Are there any benefits? To answer these questions, we’ve compiled 10 reasons on why transferring your credit card debt to a home equity loan is a great idea. Read on and be enlightened about improving your finances and cleaning up numerous credit card loans!

More Manageable Minimum Payments

Home equity loans typically charge for the interest only for minimum payments, resulting in you having lower minimum payments and gives you breathing room when your finances are not in such good shape.

Beats Transferring to Another Credit Card

Some people transfer a credit card debt to another card with a lower interest rate and while that may work, that only shaves off a small percentage. If you’ll think of the transfer fee that comes with doing this, you may not be saving any interest at all.

Save on Interest Charges with Lower Interest Rates

Credit cards charge interest rates of 19% to 21% while home equity loans charge only a portion of that. Need we say more?

A Chance to Improve Your Credit Score

Because a home equity loan is a lot easier and faster to pay off than a credit card debt, it will help raise your credit score by lowering your credit burden. A tip is to keep your credit cards even after you’ve successfully transferred your debts as unused credit will help further improve your credit score.

Better Flexibility and Freedom

Because home equity loans are typically interest only, you have the option to pay for just the minimum or pay off more of your debt depending on the current state of your finances. This gives you so much more freedom and flexibility.

Better Than Going for a Personal Loan

Because they are backed by the equity of your home, home equity loans are a secured debt that is seen as a safer investment from the lender’s point of view, hence why it has a lower interest rate and offers you more flexible terms when it comes to your credit rating and income.

You’ll Like the Availability of Customized Reports

Providers of home equity loans often will give you free information on customized debt consolidation so that you’ll be going into this better informed. Who doesn’t like that?

Faster and Easier Debt Reduction

One of the primary benefits of converting your existing credit card debt to a home equity loan is that it allows you to reduce debt faster by having better interest rates that let you pay more of your loan instead of merely paying for interest. This means huge savings for you!

Simplicity for Less Stress in Life

Paying bills has been proven by studies to increase anxiety and stress levels. By having only one bill instead of numerous credit cards, you’ll save time, money, and prevent yourself from missing a payment – all leading to a simpler, less stressful life.

Quick and Easy Online Application

If you’re not yet aware that you can apply for a home equity loan from the comfort of your home, then we’re letting you know that’s possible now! What’s great is that doing this will only take minutes and you’ve got nothing to lose!

To learn more about getting a home equity loan in Canada, you can contact Homebase Mortgages or simply fill up the detailed online form so we can help you out.

Top Tips to Consolidate Your Debt

Getting into debt is a lot easier than getting out of debt, especially if you’re not too organized. Hard work and earning some cash to cover your debts is just half the work, you will have to make sure to pay on time to avoid hefty fees and additional interest. This is why debt consolidation is a must, not only it will get you out of debt faster, it will save you a significant amount of money too!

The Ins and Outs of Debt Consolidation

Having a few debts means you will have to juggle more logistically and financially. By consolidating your debts, you can benefit from a lower interest rate and will have fewer things to worry about. You can do this by taking a loan at a low interest to pay off existing debts, essentially transforming a few or many things you have to pay for into just one scheduled payment per month.

Note that you are not placing yourself into further debt by taking another loan, you are using that loan to transform your existing debts into just one that will be easier to manage and pay for in the long run. Below are some top debt consolidation tips that our experts have compiled to help you out.

Check Out Your Options

You can use a debt consolidation loan, use a home equity loan, borrow from family, consolidate across your various credit cards, take a second mortgage, or use a home equity line of credit (HELOC) for consolidating your debts.

A home equity line of credit has fewer restrictions for paying off, although it comes with higher rates compared to a typical mortgage. A home equity loan is a second mortgage loan that works short term and is designed to improve your credit rating while lowering your interest rates. A debt consolidation loan has rates that are in between credit card interest rates and typical mortgage interest rates and is a short-term interest-only loan. Consolidating across cards may come with lower interest but take note that it can come with a hefty fee. Taking a second mortgage is often difficult to get unless you have help from professional mortgage brokers. Borrowing from family can cause stress in your relationships although it does come with the lowest interest rate.

Tackle Your Highest Interest Loans First

When your debt consolidation attempts come with a quite a few limits, channeling what you can get towards the debt that will cost you the most in the long run is the smartest decision you can make.

Assess if Debt Consolidation is Indeed a Solution for You

Debt consolidation work best if you have quite a number of unsecured debts, however, if you have secured loans, it might be wiser and cheaper to stick with them until they are paid.

Plan Your Loan Actions

Aiming to eliminate all debts is a lot smarter than simply aiming for reducing your debt. However, to achieve that, you will have to have clear definable goals, assign a deadline to said goals, and keep your plan realistic; otherwise, you will find yourself getting frustrated down the road.

Be Money Savvy

Just because you’ll be saving a few thousand dollars by consolidating your debts does not mean that you can afford to spend what you can save on trivial things. If you’ve got some extra cash, better put it to good use by paying off your debt sooner. That way, you can enjoy financial freedom later.

Go for Cash

The best way to keep yourself out of further debt while you are on your way to pay off your loans is to pay in cash. This will make you more self-aware regarding your spending habits, and is proven to reduce spending by a significant percentage.

Debt consolidation is a smart financial move, but please keep in mind that it may not work for everyone. Read up on your options, or better yet, consult with debt and mortgage experts before making major financial decisions. A few minutes invested in reading facts and talking with a professional can save you from years of financial woe.

Talk with your Toronto Mortgage Brokers today by clicking that contact us button!


Save Your Credit With Debt Consolidation

debt consolidationIf you’re swimming in debt but you don’t want to go through bankruptcy, debt consolidation could be the answer. Debt consolidation is a debt management plan that can really save your credit; while other options like bankruptcy can help you wipe the slate clean, it destroys your credit in the process. Bad credit can happen to anyone, but we can help you manage your debt. If you want to rebuild your credit, pay down your debts and move towards financial freedom, keep reading!

What is Debt Consolidation?

Debt consolidation will work with almost all types of unsecured debt; often secured debt like mortgages and home equity loans can be included in your plan. If you have private hospital bills to contend with, credit card bills, utilities (mobile phone bills for example) and anything else in between. You can even get store credit accounts rolled into your debt consolidation plan! You’ll want to make sure you bring all of your bills with you. Try to find the most up to date versions as possible so your specialist can help you settle all of your debt at once.

Do You Need Debt Consolidation?

Not everyone will need debt consolidation, but when you do look for the following signs:

  • You’re having a hard time managing your debt. If you have so many bills each month and you just can’t keep up with them, you’ll be able to put them all into a single monthly payment. You’ll know when the beginning and end of your payment plan is, and it will be managed effectively.
  • You’ve tried to pay back your debts on your own with a payment plan arranged by your creditor. Many creditors will offer payment plans that are difficult to stick to. If you’ve been through this, and you still can’t repay your debts, you need Toronto debt consolidation.
  • You’re getting harassing calls at home and work. Sometimes creditors don’t know where to draw the line and you need a buffer zone between you and them. We can help you take your dignity back and avoid collection calls.
  • You have too much interest to repay on your debts. With so many different interest rates each month, it can be hard to keep up. If you can bring down your interest rates even a few percentage points each month, you can save thousands if not tens of thousands of dollars every year in interest.

There’s no shame in needing help and we’ll help you get your dignity and your credit back. But you need to make sure that before you seek out a debt consolidation company that they’re prepared to help you. We have many years of experience; we’ll work on your behalf to give you a clear and concise plan towards debt repayment.

Always be sure that you can repay your plan, that you make monthly payments and that you keep track of when the payments are reaching the creditor. Get a copy of the privacy policy and consumer credit counselling services; your credit is your future, protect it! Visit our debt consolidation page today to learn more!

Some Tips on Debt Consolidation

Debt Consolidation

If you are struggling to manage debt and make payments, a debt consolidation loan is a solution you can opt for. With debt consolidation, you have just one payment every month and you can catch up to your debt more flexibly.

The interest rate you pay on this loan is also lower than your credit card rates. But what should you do before applying for the loan? If you are looking to pay off your credit card debt through this loan, close your account first.

Financial advisors say that people most often pay off their credit card debt but do not close their accounts. They end up using their cards again, and accumulate more debt, which includes the reused cards and the consolidation loan.

It is also important that you create a budget – know how much you need to keep aside for loan payments and other expenses. Also make sure you check your credit reports. Before making you the offer, the lender will go through your credit report.

Be prepared to explain any negative mentions on your report, and spend some time to correct any errors in it. This can make a big difference in deciding whether your loan is approved or denied.

Collect all your bills and determine which ones you would like to include in your debt consolidation loan. Generally, auto loans and home mortgage payments are not included in these loans. Identify lenders that offer competitive rates, and take care not to apply to too many different lenders as this may adversely impact your credit.

If your application is denied, ask your lender for an explanation. You could also seek help by discussing other debt repayment options with a reliable credit counseling agency.

To learn more about debt consolidation, click here!

Debt Consolidation Advice

There is no doubting that debt consolidation is one of the best ways to get out of debt. However, there are a few things you need to keep in mind before consolidating your debt; and use the experience to manage your finances more judiciously.

First things first, do seek professional help when you decide to consolidate your debt. A debt adviser can introduce you to many options, including how to effectively manage your debts yourself.

He may also offer useful advice on companies that offer debt consolidation loans. The debt repayment term is an important consideration if you take out a debt consolidation loan. A longer term means lower monthly payments, but your overall cash outflow over the term of the loan will be bigger.

You will also need to decide whether you want to take out a debt consolidation loan or a debt consolidation mortgage. With the latter, you will get a lower annual percentage rate (APR) and a longer repayment term, but you will be putting up your home as collateral.

This is especially true if you have taken out a home equity line of credit or already have more than one lien on your home. After taking out a debt consolidation loan, don’t continue using your credit card recklessly.

You will only end up replacing the debts you have just paid off with new ones, and get into this harmful pattern again. For emergencies, keep aside one credit card, but think twice every time you feel the urge to spend.

Remember that injudicious spending is what resulted in such high debt in the first place.

Contact us today and see what we can do for you.