Debt Consolidation &
There are debtors that are confused with these two financial or bank terms. Debt consolidation and consumer proposal have great differences that debtors or ordinary people don’t know. If you want to understand the difference between these loans, this is the right place to be. Our insolvency trustee Red Deer professionals are here to help.
Debt consolidation is a loan that a debtor makes to pay small loans or liabilities in one go. Availing debt consolidation increases your leverage at the same time decreasing the interest rate.
Aside from that, there are also other advantages that you may get if you avail of debt consolidation.
• Debt Consolidation Can Help You Save Money
Believe it or not, this type of loan can actually help you save money. Well, you are applying for a loan with a low-interest rate, and a low-interest rate is a good thing because you will not be dishing out large chunks of money. So, it might save you some money in the end.
• Handle Bulk of Loans In An Instant
If you are stuck in a sticky situation where you are burden by a bunch of unpaid loans, then you can use this as your solution. Debt consolidations can help you to pay multiple loans or settle debts sooner.
Now, a consumer proposal is different from the idea of debt consolidation. A consumer proposal is a process that is managed by a Licensed Insolvency Red Deer Trustee. They will help to form a proposal or an offer to extend the time of payment, pay the bank or creditor a percentage, or if you want, you can use both.
The consumer proposal offers a lot of benefits. It can actually benefit you, as the debtor and the creditor as well.
• Pay a Portion Of Your Debts Without Risking Your Assets
Through consumer proposal, you will be able to pay a portion or a percentage of your debt only. You may also get away from the risk of losing your assets or any of your possessions and even avoid personal bankruptcy.
• No Additional Costs or Fees will be Paid
You will also be away from any additional costs or fees of your debts. There are some loans that require some additional fees, which you have to pay. But if you use a consumer proposal, those additional fees will not burden you anymore.
• You Are Guided By The LIT
Guaranteed that you will be helped and guided by the LIT. They will file the proposal or offer to your creditors on your behalf. The LIT will also explain the process and the methods included in the consumer proposal for you to be aware of the actions you have to do.
Don’t Both loans have strengths and weaknesses? The debt consolidation may work for some people, and it may not be to some, and the same can be said with the consumer proposal. But the most likely action for you to do is to consult experts of professionals to identify the suitable answer or solutions to all of your financial burdens. Be guided and know the easiest solution possible. Call our Red Deer insolvency trustee experts today for a FREE consultation!