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What exactly is debt consolidation?

The purpose of debt consolidation is to obtain a loan to reimburse all or part of your debts in one single payment. If granted the loan, you only need to repay your financial institution.

Debt consolidation step-by-step

  • Find a financial institution ready to give you a consolidation loan.
  • Pay creditors with the consolidation loan.
  • Repay the consolidation loan as per the terms set out with the your financial institution.

Before you complete step one...

Make sure that debt consolidation is the solution that best fits your financial situation. You can consult a Ginsberg Gingras LIT professional for an evaluation free of charge and without any obligation on your part.

To consolidate your debts, you must first find a financial institution willing to give you a loan. Banks and other lending institutions will consider your credit rating, debt ratio, and employment status.

If you're refused, you can submit another debt consolidation request to a second financial institution. However, each request generates a note on your credit report.

It's important to make sure that your request is properly put together and that debt consolidation is right for your financial situation.

Advantages of debt consolidation

  • Simplifies your debt management.
  • Helps you avoid bankruptcy or proposal
  • Can provide a lower interest rate than the one you pay on your current debts.
  • Does not affect your credit rating.

Disadvantages of debt consolidation

  • It can be very hard to get approved for a debt consolidation loan
  • If your request is approved, you can expect fees when opening an account
  • It does not reduce the total amount of debt to repay and interest is added to the loan.

Trust Ginsberg Gingras to help you restart

Before requesting debt consolidation, take a free consultation with our professionals. This will allow you to better understand your situation and consider all potential solutions. If debt consolidation turns out to be an option, our licensed insolvency trustees (LITs) will inform you accordingly.

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