The Benefits of a Home Equity Loan for Debt Consolidation from Mortgage Lenders in the GTA

If you are drowning in debt and know that you cannot negotiate lower interest rates with your credit card companies or creditors, a debt consolidation loan may be a good decision for you. Mortgage lenders in the GTA can provide information about debt consolidation programs that can give borrowers a chance to reorganize their finances. Sources of funding can come from secured loans or personal loans, but the most convenient alternative for many homeowners is to tap into their home equity and repay the amount themselves. Debt consolidation is about taking out an equity home mortgage loan to consolidate several unmanageable debts or refinance a first or second home mortgage. Using a home equity loan for debt consolidation has many advantages.

Lower your interest rate

A debt consolidation loan using equity may have a lower interest rate than the rate you are paying on credit cards, so the loan should reduce your interest payments. Mortgage loans carry the lowest interest rates as they are backed by an asset, your home, and are therefore much less risky in the eyes of mortgage lenders in the GTA. Consolidating your debt with a much lower interest rate means that if you do not lower your monthly payments at all, you can still pay down the principal at a faster rate. This has the added benefit of allowing you to keep more and more of your own money.

Lower your monthly payments

With lower interest rates on debt consolidation loans using equity, you may be able to reduce your total monthly payment. Consolidating debt into your mortgage allows you to lower your monthly obligation by extending your payback period. With lower monthly payments, you can either take that found money and pay down your consolidated loan or use it for household expenses.

Consolidate all debt into one monthly payment

The fact that a debt consolidation loan creates one payment for many debts is a great benefit to many consumers. If you consolidate all of your debt into one home equity loan, you may find that making one payment on time is much easier than five payments on different days throughout the month. Debt consolidation does not just help you save time and money, but also helps streamline the debt repayment process – which has the added benefit of decreasing your financial stress.

Improve your credit score

By lowering your monthly payment and consolidating multiple payments into one, you are more likely to make every payment on time and in full. This will improve your credit score and give you more options with mortgage lenders in the GTA in the future.
Your home is one of your largest assets. Learn more about using the equity in your home to consolidate your higher interest rate loans or credit card balances. If you are a homeowner and you wish to see if you qualify for a debt consolidation home mortgage equity loan, contact mortgage lenders in the GTA or apply online; a mortgage specialist will provide a personal consultation to review your options and determine the best possible approach.


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