How does Debt Consolidation work?

Table of Contents

What is debt consolidation?

A debt consolidation loan lets you repay your debts to numerous creditors at once. Essentially you are left with one loan, to the company that issued the debt consolidation loan.

So far it sounds good right? There are other considerations you need to take into account.

With financial institution such as banks, you will most likely need to have a clean credit history, good home equity, co-signer and steady income. Also if collection agencies have started calling, or you have missed payments, you may not qualify for a bank loan.

Using Home Equity

If you use your home equity to obtain your loan, and, if you are unable to make your payments, then there is a chance that your home could be in jeopardy. While there are suitable reasons for using your home equity, using one’s home equity as collateral changes unsecured debt into secured debt which may or may not be a beneficial option.

Co-signers

With co-signers, this can put a family member or friend at risk if you are unable to make your payments.

Using Private Lenders

If you opt to not use a bank and go the private route, this can be costly in the long run as well. While the Ontario government has made changes to the Collection and Debt Settlement Services Act, R.S.O. 1990, c. C.14 to help protect debt consolidation customers, it still can be costly and not always the best solution. You may be required to put of some of your assets as collateral, and missing some payments could put those assets in jeopardy, and you would still owe the balance of that loan to the lender.

One of the disadvantages with a debt consolidation loan, is that it does not provide any legal protection with unsecured debt. It just transfers the debt from a group of lenders to one new lender. If you are dealing with high debts, wage garnishment or collection calls, before making a decision to consolidate your debts, It would be best to get a free consultation with a trustee. They can provide you with the best financial solution for your current situation. Having all the options laid out in front of you can help you make the right financial choice for you and your family, and know you are on the right path to getting back on your feet again.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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I can't praise Cori enough from David Sklar & Associates. Cori's acceptance and understanding of the diverse needs and concerns of her clients shines through with zero judgement. She made this process smooth and relieved much of my stress and anxiety around debt. Thank you!
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My husband worked with Chen Siga, he walked us through our options and then through the process of getting everything done. Everyone we dealt with was very helpful. Overall a wonder experience, we are so glad we contacted them and got the help we needed.
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I have been surviving on paycheck-to-paycheck basis and could not go any further because the lending interests just accumulated beyond what I can afford. Fortunately, a good friend recommended Grace Cuffaro from David Sklar & Assoc. and I finally got to settle my financial obligations in a reasonable way. Don't go anywhere else; ignore those financial brokers and social media ads who just want more money from you - go directly to the people who can really save you from drowning in debt.
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I recently had the privilege of working with Trina at David Sklar & Associates, and I cannot praise her enough. Trina’s commitment to her clients goes above and beyond the norm. Here’s why she stands out:Incredible Knowledge: Trina is well-informed and deeply understands her job. Her expertise shines through as she navigates complex processes effortlessly.Client-Centric Approach: Trina doesn’t just follow procedures; she genuinely cares about her clients. She takes the time to listen, empathize, and tailor solutions to their unique situations.Clear Communication: Explaining financial matters can be daunting, but Trina excels at breaking down each step of the process. Her clarity and patience make even the most intricate details understandable.Availability and Accommodation: Trina’s dedication extends beyond office hours. She accommodates last-minute changes and ensures her clients feel supported throughout their journey.In summary, Trina is a gem in the world of customer service. If you’re seeking debt resolution, don’t hesitate to reach out to David Sklar & Associates—and ask for Trina. You’ll be in capable, caring hands.Thank you, Trina, for making a difference!
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Trina and her staff were great, excellent job explaining on what will be required of me regarding my situation. Very helpful staff. Would highly recommend Trina and her staff.
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