Taking a big loan with the intention of repaying other small loans is an action known as debt consolidation. This action is mostly taken by people looking for a way to pay less interest on loans in the long term. A big loan is more convenient than many debts demanding monthly payments. The kinds of loans you take determine the interest you will pay. Unsecured loans for example, typically demand higher interest fees compared to secured loans. Mortgages or loans secured against property pose little to no risk, which is attractive to lenders who know they can recoup. Private lenders prefer registered mortgages, which give them the power of sale over properties in default. Rather than continue paying interests between 19%-29% on personal loans, you can choose the cheaper alternative. This money can be used in payment of other expensive loans. We have a specialist team that has been setting debt consolidation loans in Brampton and they are always available to discuss your circumstances.
Is Debt Consolidation Beneficial
Personal loans charge such high interests on loans, that keeping up with the expensive monthly charges is difficult. Debt consolidation loans in Brampton are very useful in such a situation and a registered mortgage is the best option with low interests from both banks and private lenders. Such loans are regarded as the least risky for lenders as they have a power of sale to leverage in case you are unable to honour payments. Debt consolidation loan amounts start at $20,000, which is enough to pay off expensive loans that were hurting your credit score.
Popular Reasons for Debt Consolidation in Brampton
There are several reasons why people consolidate debts among them:
- Lower Interest Rates Overall: Unlike other loans, mortgages have the best interest rates. It is better to anticipate payment for a single loan rather than straining to pay up many small debts with shockingly high interests.
- Reduce Monthly Payments: Most people choose mortgages for debt consolidation as you can negotiate long periods of repayment, which translate to lower monthly payments.
- Improve Credit Ratings: Left unpaid, multiple small loans continue to harm individual credit ratings. Paying them off leaves you with affordable rates thereby giving you a chance to boost a poor credit score.
Various Debt Consolidation Methods
We offer different options including mortgage refinancing, first and second loans against property.
Mortgage Refinancing
This option comes in handy when rates for a new loan are less than those of an existing one. If by careful consideration you realise that ending a loan early will lead to savings, in the long run, this is the best alternative. Ending a loan early results in a three-month interest fees penalty but sometimes, paying a fine is the best decision.
When is the First Mortgage Needed
If you do not have existing loans on a property, lenders will be happy to loan you the money. The first mortgage attracts very low interests owing to the low potential for loss. The interest charged for an initial mortgage is obviously lower than those for the subsequent loan.
When Can You Use the Second Mortgage
If there is enough equity, lenders can give a second mortgage on the property but at higher rates than if it was the original loan. Despite being slightly more expensive, second mortgages are cheaper than other kinds of debts. It is, therefore, a good idea to take a second mortgage for money they will help to pay other loans.
Private Lenders of Debt Consolidation Loans in Brampton
Banks clearly offer the best interests on loans but that privilege is only for people with high credit score. The rest of Brampton’s population can only turn to private lenders who do not factor in credit score in their mortgage approval process. The only difference with banks is that private lender mortgages have high interests and the customer is expected to meet the mortgage set up fees. Our team of debt consolidation loan professionals in Brampton will get you offers from different lenders in our network. Before letting you commit we help you analyse different offers so you understand the fees involved and make a conscious decision. Our experts appreciate the need to save money and work hard to choose a product that is sufficient for all your pending loans.