How Consolidating Debt can Save you Money

Calculating debt on a calculator

According to Statistics Canada, Canadians owe $1.67 in debt for every dollar of disposable income that they earn. This debt includes mortgages, car loans, personal loans, and credit card debt. While some debt, such as mortgage debt can be “good debt”, consumer credit card debt comes with high interest rates, meaning you end up paying much more in the long run to pay down your debt. Personal loans typically come with a much lower interest rate than credit cards, and consolidating your debt into a single loan cuts down on the number of bill payments you are required to make a month. Therefore a consolidation loan to consolidate credit card and other high interest debt can make your life easier by simplifying your payments while saving you money on interest.

A personal consolidation loan can be a good lending option if you want to make sure your payments will stay the same for the entire length of your loan. With a personal loan, you will know your “free-from-debt” date, and once your loan is paid off, you can then redirect those loan payments to your RRSP or TFSA savings, or use it to top up your emergency fund.

Considering consolidating your debt? Find out how much you’ll save with a consolidation loan by using Cambrian’s Loan Consolidation Calculator.