Despite your best efforts, you are barely putting a dent in your debt. Does this sound like you? Maybe it’s time to rethink your debt repayment strategy in light of what is happening with COVID-19. One option is to consolidate debt, but how do you know if debt consolidation is the smart strategy for your financial situation?
Benefits of debt consolidation
One of the benefits of debt consolidation is that you centralize your payments. Typically, that means you can pay your debt down more quickly, because you are able to apply more money towards the principal of the debt itself. However, not all debt consolidation strategies are the same, so it is important for you to understand your options.
Is debt consolidation the solution to your debt problem?
Here are some signs that you might need this strategy.
Multiple credit cards with high balances
- Is your debt load comprised of multiple credit cards, many of which have high balances and interest rates?
- Are you making little more than the minimum payments?
- Are you taking cash advances out on one card just to make payments on another?
If you have answered ‘yes’ to any of those questions above then it is time to look at debt consolidation options.
You have a cash flow problem
- One problem associated with having multiple debt payments is that you just don’t have the cash flow to cover all of them.
- You may be using credit just to make ends meet, because your debt obligations and living expenses exceed the money that you’ve got coming in.
If you consolidate all your credit card debt, you can have a single payment that is targeted at paying down debt. This will generally allow you to pay down the balance quicker.
Options to consolidate debt
Depending on the nature of your debt, your credit history and your financial situation, there are a few ways in which you can consolidate debt.
With EmpireOne Credit, you will have access to information on how to become debt free sooner! More importantly, you will have access to our own qualified counsellor to help with debt management, budgeting, and answer any financial questions in order to improve your financial understanding.
If you’re looking for a credit counsellor in Toronto, get a quick assessment with us today or call us at 416.900.2324. We will help you develop a plan, reduce your interest costs and get out of debt over time.