There are two types of people: those who remember all their debts and those who find last month’s bill in their pocket. Anna is in the second group. She has a credit card here, a loan there, and a line of credit somewhere else, all with different due dates. So she looks into debt consolidation loan.
It means combining several debts into one loan and then paying off just that loan. Buduchnist Credit Union offers this type of loan, too, and for Anna, it’s a chance to get rid of the mess in her payment calendar.
What Debts Can You Combine Into One Loan?
You won’t have to deal with each lender separately. The new loan covers all your existing debts in one transfer. It can cover credit cards, personal borrowing, credit accounts, and other high-interest debt. Anna owes $4,500 on a credit card, $5,000 on a personal loan, and $2,500 on a line of credit. That’s $12,000 in total.
She checks the debt consolidation loan at BCU Financial, where the variable rate starts at 8.59%. She discusses the amount and repayment period (one to five years) with a specialist. Now, instead of three lenders and different due dates, she has just one payment to make.
What Are the Benefits of a Debt Consolidation Loan in Canada?
Such a service can help you manage your debt in a few ways. Here are the main benefits of getting debt consolidation loans from credit union:
Just one payment instead of many.
You may pay less interest than on a credit card.
A clear payment schedule, so you’re less likely to miss a due date.
Help from advisors who can find a loan term that fits your budget.
Let’s look at the first benefit. Anna used to make three payments a month and missed two due dates in six months. Now she has one payment and one reminder on her phone. The rate on BCU’s website is variable, so it isn’t fixed. Her payment may change along with BCU’s Prime Rate. It’s best to discuss the repayment terms with an advisor, as everyone’s situation is different.
How to Pick the Right Loan
To find the best credit union for debt consolidation loans, look for the lowest rate, but that’s not enough. Check the fees and how long you’ll be paying it off, too. You can apply in person or online, and it usually takes a couple of working days to get an answer.
Unlike a car or home loan, you don’t need a down payment. You’re paying off old debts, not buying something new. Pay with your credit cards after that, but try to keep your balances low. And with all your debt in one place, keeping track of payments is much easier.
