How does Debt Consolidation work?

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 and live in the Toronto area, call us at 416-498-9200 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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The best decision I've made was to contact David Sklar & Associates, they are experts in this matters and also have dedicated Licensed Counsellors that provide the best customer support, like Rhoda Lewis, who I highly recommend. She worked tirelessly on my case, explaining ever detail to me willingly. She demonstrates a true interest in her clients. I appreciate how she patiently walked me through what to do, step by step. I now have control over my finances, as a result my life is much more peaceful and I can focus on what matters. Thank you!
Nilda H.
20:18 16 Jun 22
Very helpful and friendly! I am more than satisfied with my experience here. And more than happy with the outcome! Would definitely recommend .
Peggy Bulger
15:10 14 Jun 22
Jerry at David SKLAR helped me thoroughly understand my options and made me feel at ease. If you are looking at this type of service/help, I 100% recommend you give them a call.
Colleen H
12:50 14 Jun 22
Rhoda is a wonderful person, She help me and guided me throughout the process. I couldn’t do it without her support and expertise. Now I can start fresh and full of hope of a better life ahead of me.
ariezel erandio
21:33 06 Jun 22
The service I recieved from David Sklar and Associates was great. I was able to meet with Christin Sylver. She is kind, understanding and, professional. She was able to answer all the quesions that I had regarding my debt. At the end of our meetings, I felt that there is a heavy burden lifted from my shoulders. I recommend Chistine to anyone who is looking into debt relief.
Aliya H
12:11 04 Jun 22
Jerry is a very patient person, he answered all my questions and made this experience so smooth and easy for me. I was not sure what to expect but dealing with him made me feel so much better. He sure knows what he is doing and how to put people at ease for sure (should have done this long ago). I recommend him to anyone I am so glad I had him on my side and now to do my part. Thanks Jerry ur greatPattie
Patty Murphy
21:34 18 May 22
Rhoda Lewis helped me achieve a fresh start two and half years ago! She was very professional with a very warm, caring personality! I emailed her today with a question and she responded quickly. She's great at her chosen profession!!
Debbie Livingston
01:24 11 May 22
Nothing but good things to say about Jackie. She was so nice and so understand and everything was so quick and easy. In a matter of a week, there was the solution that I never thought was possible. Thank you so very much for everything that you have done. ❤️❤️❤️
Cassandra Keenan
21:05 10 May 22
I was in a lot of debt and stress, Jackie Stanley with David Sklar & Associates was very professional, and extremely helpful with getting out of debt. I should of did this sooner, they take the all the weight and stress of a persons shoulders, amazing team at David Sklar & Associates!!
Hubert Z
03:08 10 May 22
Jackie helped me out during a really tough time and she made the entire process very easy and painless. I highly recommend reaching out to her if you find yourself in any financial trouble. You won’t be disappointed!
prettylush 13
02:42 10 May 22
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