Tips to Get Approved for Debt Consolidation Loans in North York

Debt consolidation loans in North York can be one of the best ways to streamline 
numerous debts and make your monthly payments more manageable. However, it’s not 
very easy to obtain a loan nowadays. You can’t just walk in a bank or a finance company 
and expect them to lend you the amount you need just because you ask. Lenders these 
days are very careful who they grant a loan to and want to be very sure that they will be 
paid back the money owed them.

So how do you figure out if you qualify for a debt consolidation loan and increase your 
chances for approval? Here are some tips:

Figure out how much you need to borrow

This is an important first step to do, so that you can have a clear picture of what amount 
you can exactly afford to borrow. Calculate all the debts that you wish to consolidate. Next,

work 

out a budget to determine how much monthly payment you are able to make towards the 
consolidation loan. Once you’ve looked over your existing debts and have an approximate 

number for your monthly payment, decide on the exact amount you have to borrow. Keep 
that number in mind when applying for a personal loan to avoid borrowing a higher amount 
which you won’t need or can't even afford to pay back.

Choose the right type of loan to make

There are two main types of consolidation loans that you can make, a secured consolidation 

loan and unsecured consolidation loan. With secured loans, you will need to put up collateral 

as security for repayment of the loan. Most commonly, lenders ask for real estate property 

such as your home or other valuable asset you own, such as your car or art, jewelry or 

collectibles or even investment accounts. In this type of loan, you can borrow a higher amount 

and get a lower interest rate even if you have a low credit score because of the security that 

the collateral offers the lender. You lose assets you offer as collateral in the event you default 

on loan payments.With unsecured loans, you do not have to provide any collateral but you will 

need a high credit score to get approved, and you may end up with a higher interest rate than 

a secured loan.

Check the state of your credit  

Lenders will look at both your credit score and credit history. You want to make sure that 

they see a fairly high credit score. The higher your credit score, the more it will help lenders 

to see you as being safe to lend to and that you are able to keep up with payments. If you 

have a very low credit score, lenders will likely reject your loan application. On top of your 

credit score, lenders will also look at your credit history to gauge your credit worthiness, 

whether you have defaulted on a loan, how many times this has happened in your financial 

history and if you have been on any debt repayment program. You need to prepare all your 

credit information before you apply. If there are errors in your credit report, take the steps to 

dispute them so they can be fixed. If you have a low credit score, you need to take action to 

raise it so you can qualify for a loan.

If you are struggling to manage your debts month after month, debt consolidation loans in 

North York can be an option to consider. Although it is important to know that it’s not the only 

option you have. It will really help if you talk to a debt professional like a licensed insolvency 

trustee or a certified credit counselor to find out the best way to consolidate your debts or if 

there is another solution to your financial challenges.

Tips to Make Debt Consolidation Mississauga Work for You

Debt problems are very real for many residents of Mississauga, but consumers are fortunate to have many options that can help make it possible for them to get out of debt. Debt consolidation Mississauga is one of the simplest ways that is why more people are turning to it to help them manage their existing debt.


Debt consolidation is a debt relief solution that helps you pay off multiple unsecured debts such as credit card debt, payday loans, utility bills, unsecured lines of credit using one new loan. When you consolidate your debt, you only have one payment to make instead of several payments with different creditors. In addition, it reduces the monthly amount and interest charges that you would have to pay to settle the debt. .


It’s a simple, straightforward solution with some benefits:

• You have only one payment to make instead of multiple payments.
• You pay at a lower interest rate.
• You pay one creditor with a single due date instead of multiple creditors with multiple payment deadlines.
• You get to repay many of your debts.

But, can it really be this simple and easy?


Remember that when you are consolidating debt, you are simply getting a new loan to pay off your old debts. You are not reducing the amount of your debt, your debt level remains the same. Nothing has changed essentially. You are only restructuring your debt and refinancing with a new loan to pay off some of your debts.


If you can combine all of your credit cards, line of credit and other loans into a lump sum and you can pay this off with at a lower interest rate and with a monthly payment that’s manageable, then debt consolidation can be a godsend. But if you don’t know how to consolidate your debts the right way, you could be worse off.


Getting out of debt through debt consolidation can be a real possibility if you keep in mind some of these tips.


Get a new loan with a low-interest rate


Interest rates are the real culprit here. They can really let your debt balloon, so reducing the amount of interest you pay should be one of the first things you need to work on. Try to negotiate with your existing credit card providers and ask them to lower your interest rate. If your credit rating is reasonable, they may help you to avail of one of their low-rate cards. You can also ask your bank or credit union for a term loan which usually come with lower interest rates than most credit cards.


Research your options before consolidating


There are many ways to consolidate debt. In Canada, your options include:


Unsecured loan - A loan that is not tied to any asset.

Secured loan - A loan that requires collateral as security for repayment.

Balance transfer - Where you transfer your outstanding debt to a low interest or zero interest credit card for a certain promotional period or a new or existing line of credit.

Debt settlement - Where you stop making payments and then negotiate with creditors to accept a smaller amount as full payment.

Debt management plans or DMP - A payment plan where you pay a specified monthly payment to a credit counseling agency who disburses this to your creditors.

Using a home equity loan / refinance mortgage / second mortgage - A loan that you take out against the portion of your home that you own.


The right type of consolidation loan will allow you to pay off your debts at a lower interest rate and a payment plan that is manageable.


Be mindful of taking a debt consolidation in Mississauga only if it is the best option for you and your family. Talk to a Licensed insolvency Trustee before making any final decision so you can weigh in all the options you have to help you find the right solution.