If you’re worried about securing a loan due to a string of past incidents in your credit history, or if you have “bad credit,” but are working toward restructuring your personal finances and spending/savings strategies in order to rebuild or build toward the future, debt consolidation loans can help take the pressure off as you work toward these goals.
What is a Deb Consolidation Loan
According to Government of Canada, a debt consolidation loan is a single loan (generally from a financial institution) that allows you to repay your debts to several or all of your creditors at once. You are then left with only one outstanding loan – to the financial institution.
Here are five key benefits of choosing a debt consolidation loan to get your finances back on track.
Debt consolidation lets you take out a single loan to pay off other debts. This has several ancillary benefits. Firstly, it moves some of the stress of multiplication off of your plate: you don’t have to worry about insistent reminders from a range of creditors, nor must you schedule multiple payments with a variety of terms. From a planning and personal finance management perspective, debt consolidation also allows you to focus clearly on a single objective rather than trying to prioritize the importance of one debtor over another. This clears up your financial management workflow to emphasize the creation of new opportunities for better planning, growth and savings.
The cascading effect of interest rates from multiple sources will take a large bite out of your wallet over time. Debt consolidation removes these additive effects, helping you pay off your debts more quickly or under a time frame that does not create undue financial pressure. This helps debt consolidation customers return to a stable financial foundation from which to put new personal finance plans into effect.
Credit Score Protection
Your credit score, while not the full measure of your worth as a customer of debt products, is an important first impression that will be made in the development of many key financial relationships. Even if it has taken a bit of a bruise, debt consolidation can help. Consolidating credit cards with high balances using an installment loan — a loan with fixed monthly payments — may actually benefit your credit rating, especially if you use the loan to pay off credit cards that are near their limits.
Less Collections Pressure
One added advantage of a debt consolidation loan is that you won’t have to worry about irritating collection calls any more. If you owe a number of debts, you’re likely to lag behind on your payments. Under such a circumstance, creditors typically turn their account over to the collection agencies. A debt consolidation loan would help you pay off all these debt balances and effectively put a stop to collection calls.
urLoan offers a loan protection plan. The plan varies slightly depending on whether your loan if under or over $5,000; however, it is there to protect you in case of job loss, injury, illness and in the worst possible case if you pass away:
- If you are laid off, your payments are covered up to 6 months. Some restrictions may apply.
- If you are injured or ill, your payments are covered up to 6 months. Some restrictions may apply.
- If you are critically ill, your payments are covered 100%. Only applies to loans under $5,000.
To find out more about our loan protection plan, contact us