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Solutions for Debt Consolidation in Ottawa & Eastern Ontario

Debt Consolidation describes the process of acquiring a loan that will allow you to manage and repay your debts to a large number of creditors at once. By doing so, you may achieve a lower interest rate on your combined debt than you would have to pay if you separated your payments out in to smaller amounts. It enables you to simplify your finances into one monthly payment instead of several payments that are typically due on different days. This loan is typically sought from a financial institution, and the amount should be equal to the amount of your total outstanding debts.
At D. & A. MacLeod, our team can assist you with developing a debt consolidation plan in Ottawa, Smiths Falls, Brockville, Orleans and surrounding areas to get finances back on track.

Practicalities of Debt Consolidation

Many people use debt consolidation when they have credit card debt since credit cards have higher interest rates than an unsecured loan from a bank. Debt consolidation may be an optional debt solution plan if you have:

  • Credit card balances from one or more credit cards, including retail store credit cards

  • Other high interest consumer debt, such as pay day loans, a car loan from a finance company, public utilities, other consumer loans; and/or

  • Several obligations with varying due dates, such as insurance payments, child support, or student loan payments

Do I Qualify for Debt Consolidation?

When you approach a financial institution for a debt consolidation in Ottawa, you will need to provide a list of your debts and how you will pay them. Approval is more likely if you have:

  1. A steady income stream
  2. Reasonable level of monthly expenses in proportion to your monthly income; and
  3. And acceptable credit rating
  4. Asset or assets which can be pledged to minimize the risk to a lender in the event of default.

Your payment history and credit score will be reviewed to assess your default risk before deciding whether to offer you the loan. If you can offer security or a co-signer, then the bank may be more willing to offer you a loan.

Once approved, you can anticipate that a bank or credit union will lend approximately 10 percent of your net worth on an unsecured basis. Larger amounts may be possible when the economy is doing well and jobs are easy to find. Or, you may be able to increase the loan about by arranging to secure the loan, such as with a newer vehicle, boat, motorcycle, RV, mobile home, non-RSP mutual funds or real property.

Advantages of Debt Consolidation

Many people choose debt consolidation in Smiths Falls, Orleans, Brockville and across Eastern Ontario to manage their debt. The benefits of doing so may include:

  • A lower overall interest rate on all your debt, which lowers your monthly payment and total interest and allows you to pay your total debt sooner

  • Simplifying your finances with a single monthly payment

  • The ability to keep your credit cards as a back-up in emergencies

  • A reduction of financial stress if you can make the required payments on time

  • No negative impact on your credit rating (unless you are turned down for the loan or are unable to make the loan payments); and

  • You can use your assets (e.g., your home) to reduce your interest rate further.

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Possible Disadvantages of Debt Consolidation

The greatest risk of a debt consolidation loan is using it to try to resolve financial problems, but being unable to pay and reduce your debt. If you have a variable interest rate or it goes up at renewal, your debt could become unmanageable. With a debt consolidation loan you will find that you must still pay the debt in full and you must be disciplined about making payments. If you are unable to pay, you could damage your credit or the credit of a co-signer over the long term. 

If you are in serious financial difficulty, D. & A. MacLeod may also recommend other debt solutions to get you back on track. In a consumer proposal or personal bankruptcy, for example, a significant amount of your debt will be forgiven once you follow the criteria set by creditors, allowing you to pay less overall. Or, you may decide to try debt consolidation first to see if you are able to manage your debt depending on your circumstances.

Contact Us for a Free, No-Obligation Consultation

Our Licensed Insolvency Trustees (LIT) at D. & A. MacLeod Company Ltd. provide assistance with debt consolidation in Ottawa, Smiths Falls, Orleans, BrockvillePembroke, Brockville, Cornwall, Kanata, and Kingston. Contact us today online or by phone at 613-236-9111 for a free, no-obligation consultation and let us help you on the road to a new beginning.

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D & A MacLeod Company Ltd

343 O'Connor St.

Ottawa, ON K2P1V9

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