Debt Consolidation Loan Toranto

If you are one of the many people living in Toronto and struggling with high interest debt, it can feel like there is no way out. Even if you are working hard to pay off your debt, it can feel like you are making very little progress. Fortunately, there is a way that you can pay off your debt more quickly – and that is with a debt consolidation loan.

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What is a debt consolidation loan?

A debt consolidation loan is simply a low interest loan that you use to pay off your other debts. Initially you will have the same amount of debt that you did before, but because it is now consolidated into one low-interest monthly payment, it will be easier to pay off.

A debt consolidation loan can come in many forms. For homeowners, it is advantageous to borrow from their home equity either in the form of a second mortgage or a mortgage refinance. But even if you are not a homeowner, you can still get a debt consolidation loan in the form of an unsecured loan.

Why should you choose a debt consolidation loan in Toronto?

Consolidating debt is one of the easiest ways to pay off your high interest consumer debt. First, because there is only one payment to remember, there is much less risk of forgetting a payment which can further hurt your credit score. And second, because these loans tend to save you money on interest, you will be able to pay down the principle of the debt faster and save money in the long run.

And in addition to the sense of relief that will come with finally being out of debt, the efforts you make to pay off your debt will help you to improve your credit score.

How to get the best rates for debt consolidation loans?

Because debt consolidation loans can take a number of different forms, knowing which one is best for you can be difficult to determine on your own. For this reason, you should sit down with a professional mortgage broker to help you find the best type of loan and the best rates for you.

Homeowners can usually get the best rates on a debt consolidation loan because their loans can be secured using the equity in their home. In most cases, the best loan for them will either be a second mortgage or a mortgage refinance – and the most cost-effective option of these will depend on how close they are to their mortgage renewal date.

But non-homeowners should still sit down with a mortgage broker, as the broker can often help them to obtain an unsecured debt consolidation loan.

Once your mortgage broker determines the best type of loan for you, they will review the rates of their many lenders with whom they do business to find the best rate possible for you.

How to get a debt consolidation loan?

Getting a debt consolidation loan is much like applying for any other type of loan or mortgage product. You with have to gather up some financial information to present to the lender and fill out an application. Since each lender may have different requirements, it is best to let your mortgage broker help you by providing a checklist of what information and documents you will need.

Additionally, if you are borrowing from your home equity, you may also need to get a home appraisal depending on how much you need to borrow. Again, however, this is something that your mortgage broker will be able to assist you with.

Advantages of working with a mortgage broker to get your debt consolidation loan

Although it is possible for you to get a debt consolidation loan without the assistance of a mortgage broker, it is highly recommended that you work with one anyway. This is because there are many advantages to doing so. These include:

  • You get expert advice on the best type of debt consolidation loan for your circumstance.
  • Brokers work with dozens of lenders, so they can shop around to find you the best rate.
  • Brokers work with specialty lenders, so even if you have poor credit there is still a good chance that they can match you with a lender.
  • Your broker will help you with the application process and let you know what documents you will need for your lender.
  • Your broker will answer any questions you may have about your debt consolidation loan so you can feel confident that you made the right decision.

Interested in learning more about debt consolidation loans? Contact us today!

Are you interested in learning more about or applying for a debt consolidation loan so that you can get out of debt faster? If so, give us a call today to set up an appointment with one of our brokers.