Having difficulty paying off your credit cards, lines of credit or other debts? Are you using funds you saved for holidays, family events or evenings out to pay off your debts? If your answer is yes to at least one of those questions, perhaps, it is time to think and talk with a credit expert about consolidating your debts into one, easier to manage, and less expensive consolidation loan.
Debt consolidation is the process of consolidating all debts into a single loan that requires only one monthly payment, which includes payment of both the principal of the loan and the interest. If you visit your credit specialist (typically a lender at your financial institution) they will review your financial situation. Emphasis will be made on your income, your expenses and, if possible, your entire budget. This is necessary in order to determine the most optimal amount which you will be able to pay monthly to pay down your loan as quickly as possible with the smallest amount of interest.
Regardless of your credit history, consolidation loans have much lower interest rates than credit cards. For example, the average credit card rate is 19.9%. This year, UCU is offering consolidation loans starting at 4.99%*. The lower the interest on a loan, the easier it is to pay it off. On the other hand, if you don’t consolidate your loans, and simply continue to pay the minimum amount on your credit card, your debt will only continue to grow and turn into an endless problem.
To reduce the interest on your loan, you can use your property as collateral, for example, real estate, vehicles, GICs and Canada Saving Bonds. If you use your GIC as collateral, you will continue to receive interest on the investment and also have the advantage of reduced interest loans, without having to cash out your GIC.
Debt consolidation strategies have multiple advantages. Not only do they help you pay your debts down more quickly and less expensively, but your credit rating (credit score) will improve. If you continue using your credit cards, your beacon score will go up. Beacon scores range from 300 to 850 points. They take into account your credit history, the total amount of your debt, past debts, your credit applications and types of loans that you have. So, after paying your credit cards off, keep them open. Canceling your credit cards will lead to a lower beacon score. A growing beacon score will allow you to obtain the best rates in the future, if the need arises.
Depending on your personal and family needs, we offer different types of insurance for debt loan consolidation. We are ready to help you with life, disability and critical illness insurance on the balance of your loan.
It is important to remember that it is a great idea to analyze your monthly income, expenses and your budget as a whole. When you know how you spend your money, you will have an accurate understanding of how much money you need every month to cover your expenses without any financial stress. Be honest with yourself about what you can and cannot financially afford.
Consolidating debts is just a first step in liberating you from your creditors’ claims, and it is not the end of the problem. In order to reduce your financial stress, it is recommended to regularly revise your budget and financial plans with your loan specialist. Speaking with knowledgeable advisers in finance and credit, you can clearly define your financial goals within a chosen lifestyle and find ways to achieve this goal. Visit your local Ukrainian Credit Union Limited branch today and get expert advice about the most attractive financing options.
Ukrainian Credit Union
*OAC. Some conditions apply. Ukrainian Credit Union Limited reserves the right to change its rates without notice at its sole discretion.