The Truth About Consolidation Loans
If you are looking for some really useful facts about a consolidation loan then we have written this article for you to learn the most important and valuable information available. There is a lot of marketing hype and mis-information floating around out there regarding consolidation loans and we want to make sure you get the story straight before you make any decisions.
First of all, if you are like most Canadians you are in debt. Now, whether you owe a little bit or a lot, you’re probably getting more than one bill every month that you just can’t seem to keep up with. Credit cards, payday loans, department stores, cell phone companies and even the government bills can add up. The demands for your money seem to come in from all directions and they want more and more all the time. It can get to the point where you feel dragged down physically by the weight of the debt you are carrying, making you tired and stressed-out.
You think if you could just get your head above water you could get your life back together the way you want to live. If you could just get all those creditors off your back... but how?
The SMART way to pull yourself out of the quicksand is to take all the various bills you need to pay off and combine, or CONSOLIDATE them into just one stress-free payment you make every month. Your creditors stop harassing you and you get your life back.
For a lot of us, we start to make decisions based on cash flow or what’s left over on payday in order to take care of ourselves and our family. Consolidations loans start to look attractive as they seem to improve the immediate need for cash flow, but because of the pressure of trying to keep up, creditors phone calls and interest charges, little consideration is usually taken for the total cost of the loan over the 10 year term.
Now here is the most important thing you need to know - something that 99% of the people in your situation do NOT know. This is the fact that will prevent you from making a financial mistake so big, that it would make the money you currently owe look like pocket change! Most people can’t borrow from the bank and have to borrow from a non-bank, or second-tier lender, with interest rate charges ranging from 21 – 30%! Not only that but most loan repayments are made for 10 years!
We told you that the SMART way to pay off your multiple creditors is to CONSOLIDATE them all into a single monthly payment, this is common sense and proven to be effective. What most people don’t know is that there is a RIGHT way and a WRONG way to CONSOLIDATE.
The WRONG way is to try and take out a LOAN to consolidate your debt. Why would somebody borrow MORE money when they are already having trouble paying bills, paying back money they owe, paying back the money they already borrowed? If you borrowed $30,000 @ 28% to be paid off in 10 years, that $30,000 would actually cost you the original $30,000 + 59,628.49 in interest with a total repayment of $89,628.49!
The RIGHT way to CONSOLIDATE your bills into a single, sensible monthly payment is to use the CrediFIX debt pooling service. Your $30,000 of debt would cost on average 5% interest and be paid in 5 years. So the $30,000 of debt would cost you the original $30,000 + approximately $6,000 in interest making a total repayment of $36,000!
Credifix Inc. is a full service Debt Repayment Agency licensed by the Alberta Government to work on the debtors’ behalf. We are dedicated to educating consumers of their rights and responsibilities regarding their creditors, and providing them with options for debt relief.