Deep in debt with no way out? While you may feel that all is hopeless right now, that doesn’t have to be the case. Often debt is just a temporary situation that you can get yourself out of. While your debt load may be a heavy burden now, it is possible to escape the shackles of debt.
Chances are, if you own a home, it is one of your greatest weapons to help you get out of debt. With historically low interest rates, now might be the time to refinance your home to help with your debt consolidation Canada or in the United States.
How Does Debt Consolidation Work?
So, how does it work? If you have equity in your home, you can refinance and use that equity to pay down the debt you currently have, including, but not limited to, auto loans, credit cards and student loans. Some of these debts such as credit card debt likely have very high interest rates from 12 to 25%. If you refinance, you will have one monthly payment–your house–at a significantly lower interest rate than your current debts. Your money will be able to work harder at a lower interest rate.
The key to a good debt consolidation is to find a good debt relief agency to work with such as Debt.ca. They will help you not only consolidate your debts but also learn how to manage your money and make smart financial choices so you don’t end up in this situation again.
Once you consolidate your debt, you will notice instant relief. Your monthly payment on your refinanced home will likely be lower than you were paying when you had many separate bills to pay. If you had creditors calling your home at all hours, those calls will cease. If your wages were being garnished, that will end.
Debt consolidation can offer you a way to get out from under your debt. In addition, paying a lower interest rate on your home means eventually more money will be able to go to the principal faster than it would if you were still paying high interest debt.