Canadians in Brockville and across the country have lots of debt on their hands. Statistics Canada has found that around a third of all owner and tenant households spend 30 percent or more on shelter costs. With so much money going towards shelter expenses, borrowers in Brockville should look for options to lower their spending. One of the most effective ways to lower spending is by paying off any debts.

A recent report on finance found that “Canadian household debt represented 177% of disposable income in 2019.” This means that the average Canadian had $1.77 of debt for every dollar they earned. Managing accrued debt is becoming more vital to gaining financial security in Canada and Brockville.

If you are having trouble making payments to different lenders you may need to consolidate your debt and to do that you need a debt consolidation loan.

What is a Debt Consolidation Loan?

Debt consolidation loans are a form of debt relief that many people throughout Canada and in Brockville use to help get them debt free.

A debt consolidation loan is a loan you take out to pay off all your debts. It does not get rid of your total outstanding debt since you now owe it all to your new lender.  

Your previous lenders won’t bother you anymore now that they have been paid back. You are still paying for the same amount you owed, but now you only need to manage payments to one lender. The payment plan is determined during the loan approval process, but generally, debt consolidation loans come with lower interest rates than most other loans and lines of credit.

If you have trouble managing your outstanding debt and need debt relief, consolidation is a proven method for easing the burdens of debt by simplifying bookkeeping and potentially lowering costs through reduced interest rates and flexible terms.

Secured vs. Unsecured Loans

Secured loans

For a loan to be considered a secure loan, there has been a clear and legal path for the lender to regain their money if the borrower stops making payments on their outstanding debt.

In most cases, loan security is through a lien on the borrower’s property. The borrowers’ property is now collateral for the loan. In the event the borrower fails to repay the lender, the lender can sell the borrower’s property and their investment back.

When a loan is secured through equity as collateral, lenders usually offer much more money and at lower interest for borrowers.

A loan can also be secured through a guarantor who has the equity or credit to back the borrower’s loan.

Unsecured loans

Many people may not have the property or equity in a property to qualify for a secured loan from a lender, so their best option for acquiring funds may be an unsecured loan.

An unsecured loan means that there is no equity backing the borrower. With no property or assets at stake, the borrower could default on the outstanding debt and leave the lender with nothing at any time.

Due to this added risk that comes with approving unsecured loans, lenders often charge significantly higher interest rates and additional fees.

If you have bad credit, you may not meet the requirements for a loan at most banks and major financial institutions. In this scenario, you may need to look into private lenders for your debt consolidation loan in Brockville.

How to Get a Loan with Bad Credit and Consolidation Debt?

Since many people who have their debt consolidated have a history of mismanaging payments, they likely have a bad credit score. This makes it very hard to get loans from most banks and major financial institutions, however, there still are possibilities for getting a loan in Brockville, there are private lenders.

Private Lenders in Brockville

Private lenders can approve loans regardless of your credit score. If you own a home or have at least 20 percent equity in your home or property, private lenders can get you a loan in Brockville in as little as two weeks.

They can approve of loans up to 80 percent market value of your property. Private lenders typically charge fees ranging from one to three percent of the loan and significantly higher interest rates than banks on other lending institutions.

Private lenders are a diverse group of organizations, businesses and individuals each with their own requirements, fees and interest rates.

Finding the right private lender for your needs is difficult and time-consuming. The Mortgage Broker Store has a diverse community of private lenders in Brockville capable of approving loans for most borrowers, including those with bad credit and consolidated debt.

You can now navigate the Mortgage Broker Store and receive a free consultation with one of our lending experts. With our widespread connections, we can vet local private lenders and find you the best loan in Brockville.

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