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A debt consolidation is 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 into 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 Company Ltd., our team can assist you with developing a plan for debt consolidation in Ottawa, Smiths Falls, Brockville, and surrounding areas to get finances back on track.


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. An unsecured loan is a type of loan that is issued and supported by a borrower’s creditworthiness and requires no collateral. Since no collateral is needed, the lender is often at greater risk and therefore sets higher interest rates. Credit cards are a type of unsecured loan along with personal lines of credit and some home improvement loans.

Debt consolidation in Ottawa 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 payday 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


When you approach a financial institution for a debt consolidation in Smith Falls, Ottawa, and the surrounding areas, you will need to provide a list of your debts and how you will pay them.

Approval is more likely if you have:

A steady income stream

Reasonable level of monthly expenses in proportion to your monthly income; and

And acceptable credit rating

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 amount by arranging to secure the loan, such as with a newer vehicle, boat, motorcycle, RV, mobile home, non-RSP mutual funds or real property.

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Advantages of Debt Consolidation

Many people choose debt consolidation 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.

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 Company Ltd. 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.


Our Licensed Insolvency Trustees (LIT) at D. & A. MacLeod Company Ltd. provide assistance with debt consolidation in Ottawa, Smiths Falls, Brockville, Pembroke, 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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