It can be difficult to keep up with the ever-increasing costs of living, especially when you’re on a fixed income.
According to a report by Equifax Canada from September 2017, Canadians over 65 are increasing their debt more than any other age group*.
Many retired Canadians are therefore looking to debt consolidation loans to make their finances more manageable and less stressful.
What is debt consolidation?
It’s a way of paying off all of your debts and replacing them with one single loan.
The idea is to considerably reduce the interest you pay and your monthly debt payments. You also have the convenience of only paying one monthly bill, instead of several.
Is debt consolidation right for me?
There are many reasons why people might consider debt consolidation in Canada. Here are the most common ones:
Catch up with overdue bills
If you get behind with bills, it can be difficult to catch up. Having unpaid bills can be stressful and could damage your credit score.
People use debt consolidation loans to help them pay off a multitude of overdue bills, such as income tax, phone, Internet, city taxes, heating and hydro bills. It puts them back on their feet and helps give them more financial stability.
Escape the cycle of payday loans
Many retired Canadians turn to payday loans to get them through the current month or to cover an unexpected bill. The problem is, payday loans can quickly spiral out of control and lead to growing debt or damaged credit. A debt consolidation loan can pay off these high-interest loans and help you escape this cycle of debt.
Pay off credit card debt
It is easy to rack up considerable debt on credit cards, especially when you might struggle financially just to get through the month.
With interest rates that are typically around 20%, simply making minimum payments can be a financial strain.
Transferring your credit card balances onto a debt consolidation loan can relieve a stressful financial situation. By drastically reducing the interest rate on your debts, you can pay off what you owe much quicker.
Eliminate high interest loans and lines of credit
Personal, unsecured loans and lines of credit often have high interest rates and short payment terms.
Monthly payments can therefore be high and hard to meet. Consolidating this debt into a lower interest rate loan with a longer payment period can free-up more of your monthly income.
Own your vehicle outright
Monthly car or truck payments can be a struggle when you’re on a fixed income.
If your car loan has a high interest rate and short payment term, consolidating this debt not only means you fully own your vehicle, it also makes your monthly outgoings more manageable.
An easy, affordable debt consolidation solution
When you look at options for debt consolidation in Canada, there is a unique one available only to Canadians over 55.
The CHIP Reverse Mortgage®, provided by HomeEquity Bank, not only allows you to borrow up to 55% of the value of your home, it also offers rates that are a fraction of what you pay with the average credit card.
Furthermore, the CHIP Reverse Mortgage® is the only means of consolidating debt that doesn’t require regular payments. You only have to pay back what you owe when you move out of your home or sell it.
A CHIP Reverse Mortgage® can help you to reduce financial stress, increase your disposable income and get back on your feet.
Click here to find out how much money you could qualify for with a CHIP Reverse Mortgage to help you consolidate your debt.
* Equifax report https://www.consumer.equifax.ca/about-equifax/press-releases/ “Increases to Consumer Debt Highest in Ontario, Lowest in Western Canada”