Many Canadians utilize debt consolidation as a common financial tactic to handle their outstanding bills. It entails a new loan to settle many outstanding obligations, including credit card, personal, and medical debts.
Debt Relief Program Service Canada aims to make managing several debts easier by merging them into a single, reasonable monthly payment. It is essential to know which debts are suitable for consolidation and which are not because not all debts may be combined.
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What debts CAN be included in a Debt Relief Program?
Credit Card Debt
Credit card debt is among the most prevalent deficits that may be combined. The high-interest rates associated with credit cards might make it challenging to settle the obligation in a timely way. Canadians who consolidate credit card debt into debt consolidation loans can reduce interest rates and make just one convenient monthly payment.
Consolidating personal loans also applies to loans taken out for travel or house improvements. Consolidating personal loans can assist lower the interest rate overall and the number of monthly payments, which will make it simpler to pay off the debt.
A debt relief program loan can also be used to combine medical expenditures. Due to unforeseen illnesses or injuries, many Canadians struggle to pay off significant medical expenditures. Consolidating medical debt into a debt consolidation loan can lower interest rates and help make payments more affordable.
Certain student loan types may be repaid using a debt consolidation loan. One can combine several student loans from various sources, for instance, into a single loan with a single monthly payment. This can lower total interest rates and make managing student loan debt easier.
The following unsecured debts can also be consolidated:
- Payday loans: These high-interest, short-term loans that are often due on the borrower’s next payday can be challenging to repay.
- Credit card debt from department shops: Several department stores provide their credit cards with high-interest rates that may be combined into a single loan.
- Utility bills: Unpaid invoices for gas, water, and electricity can be combined into a debt consolidation loan.
- Unsecured credit lines: Some unsecured credit lines can be combined into a single loan.
What debts CANNOT be included in a Debt Relief Program Service?
Note that secured debts cannot be consolidated, including mortgages and vehicle loans. These debts cannot be included in a debt consolidation loan since they are secured by a piece of property, such as a house or a car.
Tax debt is another sort of debt that cannot be merged. Individuals are responsible for paying their taxes, and the government can garnish earnings and take properties to recover unpaid taxes. As a result, taxes owed cannot be combined.
Other debts that are not eligible for debt consolidation loans. These consist of:
- Alimony and child support: These are court-ordered payments that cannot be rolled into a debt consolidation loan.
- Court fines and penalties: You cannot combine court fines and penalties with a debt consolidation loan.
Remember that not all debts may be consolidated, therefore it is important to know which debts qualify and which do not. Before consolidating your debt, it is advisable to speak with a financial expert to determine which debts are eligible and the best strategy for your financial position.
To learn all there is to know about the debt consolidation program, speak with National Debt Relief Services (Government-Approved)
Begin right now by clicking on the link below.
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