This is the name given to taking a big loan to use in paying off other small ones. People mainly do this to reduce the interest rates they pay overall and to reduce the number of payments. It is quite unlikely that you will ever forget one loan payment each month. The type of credit a client wants determines loan interest rates. Personal unsecured loans have extremely high interests on them at 19%-29%while loans secured by property have low charges. Registered mortgages are preferred by lenders in Richmond Hill as they allow the sale of properties in default. Secured loans against real estate properties are least risky and therefore come in good enough amounts to pay off other expensive loans. We are an experienced team of professionals that has been arranging debt consolidation loans in Richmond Hill for many years now and we are always ready to discuss your issue.
Benefits of Debt Consolidation in Richmond Hill
It is increasingly difficult to make all debt payments a month for most people and that is why they find debt consolidation loans a great choice. Private lenders, as well as banks, are ready to extend registered mortgages that residents can use to pay off other loans. A mortgage will give you $20,000 or more when you can only get a few thousand dollars at high rates from a credit card.
General Reasons for Consolidating Debts
People choose debt consolidation for many reasons but the most popular include:
- Reducing Interest Rates: Interest rates for mortgages are generally lower than that for other kinds of debts.
- Reducing Monthly Rates: By spreading out a loan over a long time, you end up paying lower monthly instalments.
- Improving Credit Score: If you have pending debts, they are certainly affecting your credit score. A debt consolidation loan is a great way to improve a poor rating by paying off expensive loans.
Debt Consolidation Methods in Richmond Hill
We provide three types of debt consolidation including mortgage refinancing, first and second mortgages.
First Mortgage
As the name suggests, this is the original loan on a property, offered by both banks and private lenders. Equity is attractive to creditors who know they will get compensated through a power of sale even if the borrower is unable to repay the loan.
Second Mortgage
If there is still equity left, you can get a second mortgage that could also help in repaying expensive debts. These loans, are, of course, more expensive than the first mortgage but they are more affordable than other types of credit.
When Can You Use Mortgage Refinancing
This is possible if interests for the new loan are lower than those for the existing mortgage. You must consider the fees and penalties associated with breaking an existing loan before choosing mortgage refinancing. Note that breaking a loan is only possible if you can pay the three months interest fine.
Private lenders of Debt Consolidation Loans in Richmond Hill
It is evident that the best rates for loans are only offered by banks but not everyone qualifies. To get a bank mortgage you must show a high credit score, and the same applies to other institutional lenders. Credit unions and banks avoid loaning to poor credit score because it shows a trend of defaulting and they are not ready to engage in lengthy legal tussles to recover the money.
Private lenders will offer the mortgage you seek even if your credit isn’t so appealing. To enjoy their services, you must agree to the high-interest rates compared to bank loans. Private lenders of debt consolidation loans in Richmond Hill are very sensitive to risk and try to recover as much of their investment as they can by charging unusually high interests on loans. It is also upon the client of a private lender to pay all fees for setting up the loan.
Getting an offer isn’t easy but you have our experts who can send you many from our lender network in Richmond Hill. They will discuss all offers on the table and eventually, our specialists will recommend a debt consolidation loan method they feel is most convenient for your situation.