Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Having trouble handling your mountain of debt? Don’t worry, you’re definitely not alone. In fact, debt troubles are a common issue for many Canadian credit users out there. What’s important, if your debt is becoming a problem, is that you take the proper steps to stop it from getting any worse and alleviate it wherever possible. If you’ve been in debt for a while and have been unsuccessful in reducing it so far, don’t give up! There is always a way out of debt, as long as you’re willing to put forth the effort.
If either of those cases sounds like yours, or if you’re just interested in knowing how to manage your debt before it becomes unmanageable, keep reading. Loans Canada has some information that you might find helpful.
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Whatever type of debt situation you find yourself in, there is surely a solution, even under the most drastic of circumstances.
When debt becomes too overwhelming to handle, a debt consolidation loan is one way to get back on track. Debt consolidation is when you get a new, larger loan that you can use to pay off your other smaller debts. The point of this type of loan is to reduce your monthly payments and get a lower interest rate so that you pay off your debts quicker.
Typically, there are two common ways that Canadian borrowers use to consolidate their debts, using an unsecured debt consolidation loan or with your home equity (if you’ve been mortgaging a house). Both forms of consolidation have their advantages and disadvantages, as you’ll see listed below:
For a more detailed explanation of consolidation and how it can help you, click here.
Creditors use your financial history and credit score to determine if you are a risky borrower or not. For that reason, it can be much harder to qualify for a consolidation loan if you already have bad credit. However, offering collateral or finding a co-signer can greatly increase your chances. With a decent credit rating, constant income, and average expenses, receiving a consolidation loan shouldn’t be a problem.
What do bad credit lenders look for when assessing your loan eligibility? Find out here.
Debt management programs are organized plans that help people eliminate their debt. Once enrolled, you’ll work with a credit counsellor to create a program that will help you get out of debt. This program isn’t a loan, but rather a system that combines all of your qualifying debt payments into one monthly payment you can afford, based on your current budget.
You’ll repay your debt through your credit counsellor, who will collect your monthly payment and distribute it to your creditors and lenders. Your counsellor will guide you through the whole process and make sure that you complete your program within the agreed upon time frame.
Debt settlement is a method of reducing your debt, rather than paying it in full. It involves negotiating with your creditors in order to decrease the amount you owe them.
Look here to find out how a debt settlement would affect your credit.
Essentially, both parties involved will come to an agreement for you to pay a smaller amount, which would be noted and considered as full payment. Depending on what you negotiate with your creditors, you’ll either make one large payment or several smaller payments as a part of a payment plan. By reducing the quantity owed, the lender will still get paid but you’ll be able to save money. Generally, most creditors will agree to a debt settlement because they would rather get paid a percentage of what you owe them than nothing at all, which would happen if you filed for bankruptcy.
Thinking about negotiating a debt settlement on your own? Read this first.
Credit counselling is the process of guiding individuals toward becoming debt-free through education. Credit counsellors can provide you with valuable lessons about debt management and ways to improve your spending habits. These counsellors also negotiate with creditors on your behalf, in order to reduce interest fees or to reduce the total amount you owe. The support of credit counsellors is very helpful for those who aren’t good at managing debt. By evaluating your credit score and report, and by analyzing your spending patterns, your counsellor can create a budget to help you reach your financial goals.
For some more information about credit and debt counselling, check this out.
Credit counselling is provided by Credit Counselling Agencies. Some of these agencies are nonprofit and some charge for their services. Consulting a credit counselor will appear on your credit report for up to 3 years after completing the program. Thus, potential creditors will know that you’ve had difficulty managing your debt in the past.
Duties of a Credit Counsellor:
Want to know about credit counselling in your province? Consult our webpage.
As we’ve mentioned in previous articles, consumer proposals, while beneficial in many ways, do have a lasting, negative effect on your credit. However, they are also an effective and often necessary debt management tool. Anyone who wants to file a consumer proposal in Canada must meet with a licensed insolvency trustee, who will guide them through the process. Once you’ve hired a trustee, they will negotiate a “proposal” with your creditors on your behalf to have your outstanding debt amount and interest rate reduced, as well as to have your payment plan extended, similar to a debt settlement.
Read this to find out how long information remains on your credit report.
Here are a few elements that you can expect to encounter during the consumer proposal process:
Want to know the difference between a credit score and a credit rating? Read this.
The most extreme debt management option, which should only be considered as a last resort, is to file for personal bankruptcy. As you would with a consumer proposal, if you’re thinking about filing for bankruptcy, you’ll need to meet with a licensed insolvency trustee, who will make sure that you will, in fact, benefit from the process.
Here are a few typical steps involved when you file for bankruptcy:
Click here to learn which debts can and can’t be included during a bankruptcy filing.
Loans Canada offers a wide variety of management and debt relief products and services, fill out an application today to get matched with the right solution for your needs.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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