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Exploring Consolidation Loans in Ontario: An In-Depth Guide

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Frequently asked questions

The average interest rates for debt consolidation loan in Ontario and across Canada will change depending on numerous factors. The lender you choose to collaborate with will matter as banks will consider your credit score and income and base an interest rate off those aspects. Meanwhile, alternative lenders may offer you different loans that you can use towards debt consolidation, like home equity loans. As such, the interest rates will be different for those loans as well.

Getting a loan to consolidate your debt is possible, even if you have bad credit. It may be a challenge to receive it from traditional financial institutions, so other solutions are available such as credit card transfers or home equity loans from alternative lenders. An example of an alternative lender is Alpine Credits who don’t need to examine credit score to give out a loan.

A few possibilities could happen if you find yourself unable to fulfill your debt consolidation loan, such as late payment fees, changes to credit score, and asset collection. It all depends on your agreement with your lender.

Taking on another loan will naturally lower your credit score by a few points, but debt consolidation can ultimately improve your credit score. Most loans for consolidating your debt can cover most if not all of your outstanding obligations. As you continue to make regular payments to your consolidation loan lender, you’ll see a rise in your credit score.

A debt consolidation loan is not an exclusive product from a personal loan, and a personal loan can be used towards outstanding obligations. Lenders may advertise ways to use their loans, but ultimately, it’s up to the borrower on how they want to use the funds.