Living in Atlantic Canada comes with many different benefits. This includes everything from the beautiful scenery to the growing economy and real estate market. However, places like Charlottetown, Prince Edward Island seem to be struggling with debt. While not everyone is struggling, 6 out of 10 consumers living in the region believe they would need a large income increase to be able to live without debt.
Read this to learn how you can get out of debt fast with a low income.
This debt trouble can be handled by some, but for others, the amount (or sheer volume) of their debt can lead to a lot of stress, confusion, and potentially even some missed payments. Thankfully, debt consolidation in Charlottetown is just one of the debt relief options available to provide much-needed help.
The Two Types of Debt Consolidation in Charlottetown
In order to truly understand what debt consolidation is and how it can help, you need to be aware that there are actually two types of debt consolidation in Charlottetown. A debt consolidation loan and a debt consolidation program.
Debt Consolidation Loan
A debt consolidation loan is a loan that a person will get from a lender and use it to pay off all of their outstanding debts. So instead of making a ton of different payments to different lenders and creditors every month, you will only need to make one. These loans can also often allow you to take advantage of a lower interest rate. So in addition to making your monthly payments simple, they can also save you some money in the process.
Click here if your application for a debt consolidation loan was denied.
Debt Consolidation Program
On the other hand, a debt consolidation program doesn’t require you to borrow any money. Instead, you will work with a credit counsellor to come up with a debt repayment plan, which will be presenting to your eligible creditors. Once your plan has been accepted, you will make affordable monthly payments to your counsellor who will distribute the money to the appropriate creditors. Like a debt consolidation loan, this option can make your payments much easier to handle. However, this option can have a potentially negative effect on your credit score.
As for which type of debt consolidation is right for you, that depends entirely on your unique situation. The expert that you work with will be able to help you figure out what is the best course of action for you to take.
Bad Debt vs. Good Debt
Of course, the best way to avoid having to use a debt relief option like debt consolidation is to stay out of debt. Unfortunately, that is easier said than done. Thankfully, not all debt is bad and some debt is actually considered good by most standards. It is important to know bad debt vs. good debt, so we have decided to add in a little section to talk about what bad debt is and what good debt it.
Bad Debt
If your debt is not growing an asset or furthering yourself as a person, it is generally considered bad debt. These debts pay for products or services that don’t offer a financial return and will just hurt your finances in the long run. Examples of bad debt include credit card debt and personal loans.
Good Debt
In general, good debt is debt that is used to grow or improve an asset. This type of debt usually has a purpose and as long as you can afford the payments, you shouldn’t feel too bad about it. Types of good debt often include student loans and mortgages.
It’s important to keep in mind that sometimes debt that is usually bad can be good and good debt can oftentimes be bad. An example of this could be getting a mortgage that you cannot afford which will end up making you house poor.
Do you know what the true cost of borrowing is? Take a look at this infographic to find out.What Debt Can and Cannot be Consolidated
While debt consolidation in Charlottetown is a great option for some, you need to be aware that not all types of debt can be consolidated. The last thing you want to do is make strides toward getting a debt consolidation loan and then realize that the debt you have cannot be consolidated. In an effort to help, we have decided to go over a few different types of debt that can and cannot be consolidated.
What Debt Can Be Consolidated?
- Credit card debt
- Non-government student loan debt
- Past-due bills
- Medical bill debt
What Debt Cannot Be Consolidated?
- Mortgage
- Home loans
- Auto loans
- Boat loans
- Government loans
If you are still confused about whether a certain type of debt can be consolidated or not, the expert or professional you are working with should be able to help.
Wondering if the federal government provides debt relief? Find out here.
Is Debt Consolidation Right For You?
Do you believe that debt consolidation in Charlottetown is the right debt relief solution for you? If you do, be sure to reach out to Loans Canada for more information or assistance.
