Although the Federal government announced new benefit programs post-Canada Emergency Response Benefit (CERB), the assistance offered by the government and financial institutions will, at some point, likely come to an end. For those who are struggling, finding debt relief and long-term solutions will be crucial.
Even when you’re only able to make minimum payments, debt can make up a large portion of your monthly bills. If you have opted to defer any mortgage payments, credit card bills or student loans, there will be added pressure. Any interest that you accrued during the deferral period will be added to the total amount you owe and may increase your minimum payments. Here are three debt consolidation options:
1. Balance Transfers
Your bank or credit card provider may offer the opportunity to transfer the balance of one or more debts to a credit card or line of credit at a reduced rate over a set timeframe — usually between six months and a year.
Qualifying for a balance transfer typically requires a good credit score and good borrowing history with the lender. It will also typically involve paying an up-front fee, 3% of the total balance you’re transferring over.
2. Debt management programs
Depending on where you live, credit counsellors and other service providers may offer a handful of options that allow you to pay back debt at a reduced amount over a certain timeframe. Usually, this involves entering either a Debt Management Plan or otherwise negotiating an informal debt settlement with your creditors.
3. Refinancing Your Mortgage
Generally, our lenders are still reviewing applications for debt consolidation to roll all your bills into one low monthly payment. By consolidating your debt into a lower interest rate, more of your payment goes toward paying off the principal rather than the interest, helping you to save money and get out of debt faster while increasing your cash flow at the same time.
If debt is holding you back post-CERB, please don’t hesitate to reach out to us to see if refinancing for debt consolidation is right for you.
