Pros cons consolidating bills

25-Nov-2016 07:24

For the past decade, banks have typically charged interest rates on debt consolidation loans of around 7% - 12%.

Finance companies tend to charge anywhere from 14% for secured loans to over 30% for unsecured loans.

Most issuers charge a balance transfer fee of around 3%, and some also charge an annual fee.

Before you choose a card, calculate whether the interest you save over time will wipe out the cost of the fee.

Many factors can help you get a better interest rate with a bank or credit union including your credit score, your net worth, whether or not you have a relationship with them and whether or not you can offer good security (collateral) for a loan.

Good security for a debt consolidation loan will often be a newer model vehicle, boat, term deposit (non-RRSP) or another asset that can easily be sold or liquidated by the bank if you don't pay make your loan payments.

How to Get Good Debt Consolidation Advice for Free A debt consolidation loan is where a bank, credit union or finance company provides you with the money to pay off your outstanding debts and "consolidate" them (bring them all together) into one big loan.

If you have fallen behind on your payments, it can feel like there’s nowhere to turn for help.

Direct consolidation loans are now the only type of federal student consolidation loan.

Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.

WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.

You will lose your rights under the federal loan programs once you choose to consolidate with a private lender.

If you have fallen behind on your payments, it can feel like there’s nowhere to turn for help.Direct consolidation loans are now the only type of federal student consolidation loan.Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.You will lose your rights under the federal loan programs once you choose to consolidate with a private lender.Options to consolidate your credit card and other debts include a balance transfer credit card, an unsecured personal loan, a home equity loan or line of credit and a 401(k) loan.