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Seven benefits of debt consolidation loans

Canadian borrowers will find that consolidating their loans under one single loan can be an excellent strategy for financial management. Staying on top of multiple debt payments across several loans can be challenging to juggle with other financial goals.  

Ultimately, the major benefit of debt consolidation loan is that they provide a simple way for Canadians to improve their financial lives. Other benefits include. 

Reduce debt-related stress

Although there’s been a decline in the household debt ratio in 2023, many Canadians may still have multiple debts. A debt consolidation loan can bring borrowers peace of mind when managing their debts. By consolidating all debt sources under one loan, borrowers can focus on a single loan rather than multiple and pay off their debts comfortably 

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Lower interest rates

As you combine various debt sources into a single loan, you can reduce the interest accrued each month from multiple debts. This is because the interest cost on a single secured loan can be considerably lower than that of multiple interest rates from various unsecured loans like credit cards. As such, a debt consolidation loan can help borrowers significantly reduce the cost of their interest payments

Credit score improvement 

Combining your debts under one single loan can make it easier for you to make debt payments in a timely and consistent manner. In doing so, you will establish a positive payment history on your credit report as you continue. The convenience of a debt consolidation loan makes it easier for you to make timely payments, which can boost your credit score.   

Opportunities for other financial goals 

Your debt obligations may have held you back from pursuing other financial goals. Maybe you’ve wanted to renovate a room in your house, but you couldn’t proceed with the project because you prioritized your debt payments. A debt consolidation loan can help you pay off your debts quickly and efficiently so that you have more financial freedom to pursue your financial goals without worrying about debt payments.   

Reduced number of debt payments 

Consolidating multiple loans under one loan means that borrowers will only have one monthly payment to focus on rather than multiple. As such, the debt payments could be much lower once they consolidate their debts. Borrowers will also be able to pay off their debts faster.  

Efficient debt repayment process

Instead of keeping track of multiple debt payments across various loans, a consolidation loan can streamline the process as there’s only one monthly payment. This makes the repayment process much easier as you can easily keep track of your debt payment each month and adjust your budget for other expenses accordingly.   

Straightforward payments 

A debt consolidation loan can give you the best chance of paying off your debts. With multiple debt sources from numerous loans, it can take a long time for you to get rid of all your outstanding debts. A consolidation loan can speed up this process by combining all your debts under one loan.    

Conclusion: Get started with Alpine Credits  

Alpine Credits can help you kickstart the process of consolidating your loans. With over 50 years of industry experience assisting borrowers across Canada, Alpine Credits can help you navigate this process with the help of home equity financing. Financial Solutions Specialists from Alpine Credits can help you during the application process and advise you on the amount you can assess from your home equity to manage your debts.   

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Frequently asked questions

It can be much easier to qualify for a home equity loan than a traditional debt consolidation loan. This is because banks or credit unions look at credit scores and income levels for conventional debt consolidation loans. In contrast, Alpine Credits mainly focuses on the amount of home equity homeowners have available in their homes.   

Borrowers choose to consolidate their loans when they are juggling multiple debts across several loans and are finding it difficult to make timely payments on all of them. A consolidation loan streamlines the payment process and makes it easier for borrowers to keep track of debt payments.