A debt consolidation is when you take your mortgage along with your personal and miscellaneous debt and wrap it up into one loan. You are now able to extend the time period to pay off that loan. At first, this may not seem like a great idea because you are going to be in debt for a longer period of time. But… if you can take it one step further you will see why this is such a great idea. By stretching out the amortization period you will shrink down the monthly payments. You can literally save over a thousand dollars per month in certain situations. If you take the money that you are saving each month and apply 100% towards the loan you will pay off your debt in 10 years as oppose to 20 or 25 years.
For example here is a typical households debt situation.
$230,000 in total debt (mortgage, credit cards, store cards, personal loans).
$2,500 in monthly payments.
Debt free in 25+ years.
$233,000 debt consolidation loan.
$1,320 in monthly payments.
Apply 100% of savings to loan = debt free in 10 years.
Apply 50% of saving to loan = debt free in 15 years.
Apply 0% of saving to loan = debt free in 30 years.
Our financial statements here in Canada are looking a lot like they did in Europe about 5 years ago. It’s about time that we take this crisis into our own hands. This problem is fixable just by educating the people on what options are available. This is a great option and can change your life if you can qualify for such a great program.
You can get out of debt years earlier and save thousands in interest.