Debt Consolidation in Vancouver BC
Using your properties equity might be an option for you and can be a way of possibly helping or saving your credit.
Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others. This commonly refers to a personal finance process of individuals addressing higher interest consumer debt like credit cards, personal lines of credit, car loans, department store cards. If you own a home and have more than 20% equity in your property you may be able to refinance your home at today's still historically lower interest which could lower your monthly expenses. With these higher interest debts paid off your cash flow should improve, just be aware that in doing a refinance and rolling your consumer debt into your mortgage you are also increasing your monthly mortgage payment but the interest on your mortgage will be much lower than the higher interest paid on those other debts.
Once you have looked into and successfully gone through your refinance the key to maintaining good fiscal balance is to not go on spending spree now that your credit cards and personal line of credits are at zero. I will often advise a person with multiple cards to pick 1 or 2 credit cards to use for their essential & online purchases and put the others away someplace safe so not to tempt yourself to spend. I believe in keeping these other cards for an emergency and as an open trade line helping you maintain a healthy credit score.
A couple of things to think about when refinancing to payout higher interest debt. When you break your current mortgage to roll these debts in you will be charged and early payout fee by your lender. You will also have legal cost either by a Notary or Lawyer to register the new mortgage on title and possibly an appraisal fee. Even with these extra costs it could still be worth it to refinance and save you hundreds maybe thousands over time.
A visual aid example;
Monthly payment on $245,000 mortgage: $1,650
Monthly payment on $15,000 credit card debt: $500.00
Total monthly payment: $2,150
Monthly payment on $270,000 mortgage (debts + early payout penalty): $1,740
Total monthly payment: $1,740
That’s $410.00 more in your pocket each month. How you use that extra money is up to you.
By taking this route you can save yourself from having the hassle of trying to explain a consumer proposal. You can save your credit score and best of all save on high cost interest like you see on credit cards. If you have the equity this could be a great option to look at, before things get to out of hand. Home financing typically have lower interest rates rather note loans from banks.