What Is A Debt Consolidation Loan
A debt consolidation loan is a personal loan you can use to pay off your outstanding debt.
This is how it works:
If You’ve Got Debt Problems But Are Not In A Debt Crisis
Don’t visit a debt counselling agency. Not just because they’re heavily oversubscribed especially during these unprecedented times and should be left to those in urgent need, but more importantly, the solution they use isnt for you.
Debt counselling involves negotiating with creditors and even bankruptcy, individual voluntary arrangements or debt relief orders . These are serious measures, designed for those with limited alternatives, in effect drawing a line and saying “this person is no longer within the system”. The result is the debilitation of your credit score and less access to financial and some consumer products. Instead, there are a couple of sources of help:
Take time to go through the checklist. The below is designed to take you through every single way to take on your debts, cut the costs, and speedily pay them back. So take some time and go through each to check whether it applies to you.
Help and support from those in the same boat. Want help, or want to talk about it? There are many people in the Debt-Free Wannabe forum in a similar boat, all supporting and helping each other reach what they call their “debt-free day” after going through the checklist. This is an amazing resource.
When You Can Get Enough Funding
Depending on how much you owe and how high your credit score and income are, you might not qualify for a large enough loan or credit limit to accommodate all your existing debts. In that case, you might consider consolidating partially, or you might decide that opening a new account isn’t a good idea.
How To Get A Sofi Debt Consolidation Loan
The first step toward consolidating debt with SoFi is to check for pre-qualification online. You’ll need to make an account on SoFi’s website, but then you’ll be able to see your odds of approval and an estimate of what your APR might be if you’re approved. That way, you can see if you’re likely to get rates that are lower than the ones on your existing debt.
If you’re pre-approved for a SoFi debt consolidation loan, you may want to also use WalletHub’s pre-qualification tool to check your status with other lenders. That will ensure you get the best deal.
If you decide that SoFi is the best option, you can then submit an application. Keep in mind you will need at least a 680 credit score for final account approval.
You should receive a decision in 2 to 4 business days, though it could take up to 15 business days if you’re self-employed. Once you get your money, you can use it to pay off your old debts, consolidating all of them into one loan owed to SoFi.
Yes, Navy Federal Credit Union does offer debt consolidation loans. You can take out a personal loan from Navy Federal Credit Union and use it to pay off existing debts, thus consolidating those debts into a single new balance with one monthly payment that you must make to Navy Federal Credit Union. Navy Federal Credit Union does not specifically refer to their loans as “debt consolidation loans,” so you’ll need to take out a general-purpose personal loan.
What Are Government Debt Consolidation Loans
Contrary to popular belief, advertisements and brochures that talk about debt consolidation government programs are simply false and misleading.
The fact of the matter is that the UK government does not formally offer debt consolidation programs, which may come as a surprise to people in a troublesome financial situation whove heard that the government does.
The UK government does, however, provide a variety of other useful debt solutions to people who lack both money and information.
Government programs usually involve IVAs, bankruptcy programs, Sequestration , Minimal assets process , DROs, Protected trust deeds , and Debt payment programmes .
If youre someone who doesnt know where to go to get government help, you can find useful information from a variety of counselors and debt help services.
These counselors and information-based services are available, though they usually charge money for the information they give to their clients, be it a person or a company.
However, thatt not the end of it. Although not government schemes, Im going to discuss if and how you can get free debt consolidation loans in the UK.
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Why Speak With Us About Debt Write Off
Many people struggling with debt say that it causes them significant distress and that they dont know how to deal with their financial issues. In fact, 50% of people in debt have a mental health problem.
Thats why were here.
We can help you to make the best decisions for your personal circumstances and assist you in achieving debt write off as soon as possible.
What Debts Can Be Consolidated In Alberta And Which Cannot
However, before you assume that all of your debts can be consolidated and made simpler, that, unfortunately, isnt the case. There are some types of debt that are not eligible to be consolidated in Alberta and Canada, in general. Lets take a closer look at the types of debt that can and cannot be consolidated.
Can Be Consolidated in Alberta
- Government loans
- Back taxes
If you are confused about whether your specific kinds of debt can be consolidated, be sure to reach out to an expert or professional. Not only will they be able to provide you with this information but they can guide you through the debt consolidation process or even suggest an alternative debt relief option available in Alberta that may better suit your needs.
Need another debt management product? Look here.
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Low Interest Debt Consolidation Loans
Low interest debt consolidation plans excite many people who feel permanently indebted to high interest debt. The promise of low interest debt consolidation loans is simple: sign up, reduce your interest rates, monthly payments, and pay your bills off faster.
Alas, there are few better ways to make a dent in your debt beyond controlling the rate at which it grows. Credit cards, which frequently charge 18% per year, can double your account balance every four years. After twelve years of a reckless indebted state, the debts have grown to eight times their original size. That means a $2,000 vacation package may very well cost you up to $8,000, $6,000 of which is pure interest, and interest on interest.
The power of compound interest has made many millions of people rich, just as it has made many millions of people poor. Obviously, when you invest at an 18% annual rate its hard not to become excessively wealthy. Just imagine if you could earn $180,000 per year on a $1 million investment. Even better, $90,000 per year starting with only $500,000.
Lets get down to why you might choose to consolidate your debts:1. Lower monthly payments if you manage to decrease your interest rates, then the monthly payment will also drop, while allowing you to pay off the debt in the same amount of time. This is a great way to fix budget problems that arise when your outgo exceeds your incoming funds.
First and foremost, we need to decide what your goals are:
Debts That Can Create Financial Issues For Older Adults
Today, the top two types of debt held by most seniors are medical bills and credit card debt.
Unfortunately, studies show that these unsecured debts debts that are not backed by collateral are among the most stressful types to carry. The stress of carrying any debt at all can damage the physical and mental health of seniors.
This is just one reason older adults are concerned about retiring with debt. In fact, a survey from AARP and the Ad Council found that paying off debt was the highest financial priority among people aged 40 to 59, even more so than saving for retirement.
Tip: Before sending money to debt collectors, seniors should check and see if theyre judgment proof, meaning theyre exempt from legal action by debt collectors. People who live on fixed government benefits or minimal income often fall into this category.
Debtors should also check to see if their states statute of limitations has passed since they last made a payment toward the debt, since they may no longer be legally required to pay.
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What Are Secured Debt Consolidation Loans
Secured debt consolidation loans are backed by collateral. The recipient pledges an asset such as a home, vehicle or property in exchange for the loan. This is how a traditional car loan or mortgage works. If you stop paying it off and the bank will repossess your vehicle or house. With a debt consolidation loan, you risk losing the pledged asset if you do not pay.
An example of a secured debt consolidation loan is a home equity line of credit, or HELOC. A HELOC allows you tap into the equity you have built into your home to get a low-interest rate on a large revolving line or credit. HELOCs frequently go towards debt consolidation or funding a project.
How To Find The Best Debt Consolidation Loan In Canada
Consider the following factors when you browse debt consolidation loans in Canada:
- The annual percentage rate of the loan shows the total cost of borrowing . Compare several low rate debt consolidation loans to find the least expensive option.
- Loan amounts. Find a lender whos willing to lend you enough money so that you can pay off all of your outstanding debts at once.
- Fees. Aim to borrow from lenders that dont charge extra fees such as origination fees, early repayment penalties, late payment fees or NSF fees.
- Term. Find a loan term that gives you monthly payments you can afford but is short enough to prevent you from paying unnecessary interest.
- Eligibility requirements. Make sure you meet eligibility requirements such as age, residency, income and DTI requirements before you choose a loan.
- Borrower reviews. Check a lenders reviews to make sure it has a good reputation.
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Dont Worry Heres What To Do
There are several debt solutions in the UK that can be used to improve your finances. Choosing the right way to tackle your debt could save you time and money, but the wrong one could cause even more harm.
Its always best to find out about all your options from a professional before you take action.Fill out the 5 step form to get started.
struggling with debt
Question 1 of 5
Do I Qualify For Debt Consolidation
Answer these questions below to find out whether you fit into the criteria to get a debt consolidation loan:
If you have mostly answered yes to these questions, then you could possibly qualify for a debt consolidation loan. However, it is important to remember that the decision to grant you a debt consolidation loan is entirely up to the lender. Most lenders prefer providing loans on a case-by-case basis.
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Best For Additional Features: Avant
- Time To Receive Loan:1 Days
- Loan Amount:$2,000 – $35,000
Avant works with borrowers who have poor credit. While the starting APR is high, and some may have to pay an administration fee, terms may still beat what other lenders offer to applicants with low credit scores.
Available to people with low credit scores
Pre-qualification does not impact credit
Funds available in one business day
Administration fee up to 4.75%
Minimum loan amounts vary by state
Avant, a company founded in 2012, services loans from WebBank.
Borrowers give Avant high ratings for its quick and easy process, from loan application to funding. The lender offers pre-qualification with no hard inquiry, and funds are available in as little as one business day.
Unique features of this debt consolidation loan include an exceptionally low credit score requirement of just 580. Avant also offers loan modification plans to help borrowers who struggle with repayment.
The downside is that APRs range up to 35.99%, and while Avant’s debt consolidation loans are available in amounts ranging from $2,000 to $35,000, minimum loan amounts vary by state. Late payments fees vary by state as well. Joint applications and co-signers are not allowed.
Applications can be submitted online, and Avant can be reached at 1-800-712-5407 for assistance.
Top Questions People Ask Us
A debt consolidation loan allows you to move one or more of your existing debt into one place to make it more manageable. Customers typically move their credit card, store card or other forms of loans.
The APR makes it easy to compare different loan products across the market.
The representative APR is the rate a provider reasonably expects most applicants to receive. It’s not a guarantee – your personal APR could be higher or lower than the advertised, representative APR.
The APR you receive may vary from the advertised rate. This is the representative rate which we expect most people who apply to get.
The rate you are offered will be a personalised rate based on your current individual circumstances, including credit information held about you by credit reference agencies, the loan amount you borrow and length of time you borrow for.
We offer a Fast Checker quotation tool which enables you to find out how likely you are to be accepted without impacting your credit score. All you need to do is provide a few details. Find out more by clicking our Fast Checker tool
Yes. A credit check will be completed to help us make a decision on your loan application. Please read our decision explained leaflet for more information on how we assess your application.
Yes you can, however, before applying for a debt consolidation loan you should review your options to make sure that the loan which you are considering is right for you
Still have questions about loans?
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How Can I Apply For A Debt Consolidation Loan In Alberta
Once youve found a debt consolidation lender in Alberta that you feel comfortable with and are ready to start your application, youll need to follow a few simple steps:
Best Debt Consolidation Loans Available In 2021
If youre ready to start depleting your debt, its time to start comparing providers. Here are a few of the best debt consolidation options available to consumers in 2021:
Loan Amount: up to $300K
Loan Term: 3 60 months
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or learn more by reading our complete Loans Canada review.
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How Much Can You Save Using A Debt Consolidation Loan
To demonstrate the savings of a consolidation loan, lets say you have two credit cards with one holding a balance of $3,000 and another with a balance of $2,000. Assuming youre making monthly payments of $200 to each credit card, how long will it take to pay it off, and how much interest will you pay?
Similarly, well calculate how long and how much it would take to pay off the credit cards if you consolidated it into a personal loan. For this example, well assume youve secured a 2-year personal loan with an interest rate of 7.5%.
As you can see in the table above, by consolidating your loan, you would save $286.95 on interest and youd be paying $175 less each month. The only downside is that youd be making payments for a longer period of time.
However, if you lower your term to a year and increase payments to $434 a month, you can pay off your loan within 12 months, and only pay $208 in interest.