Living with debt is a way of life for millions of Canadians.
The average credit card balance reached a record high of $2,121, according to the latest Equifax Canada’s consumer survey via the Financial Post. The average non-mortgage debt is $21,188, the highest it’s been since the first quarter of 2020.
And all this is causing a lot of stress. The same survey shows 53 per cent of residents feel anxiety over their amount of debt. Last year, more than 60 per cent said they were comfortable with their personal financial outlook. Now? Only half of respondents feel that way.
That said, crawling your way out of debt is still possible, but two steps in particular will give those efforts a huge boost.
No. 1: Time to Consolidate!
Debt consolidation is one of the most effective ways to get out of debt, and its simplified process and relatively quick results make it one of the most ask-about tactics.
Consolidation involves taking out a single loan to pay off multiple debts. Those debts are typically associated with credit cards, personal loans, and lines of credit. Consolidating everything down to one monthly payment can potentially save money on interest charges, too.
These loans typically have lower interest rates than credit cards, plus they often allow the borrower choose a longer repayment schedule, which also lowers your payments.
However, not everyone qualifies – especially those with exceptionally low credit scores.
No. 2: Work with a Debt Consultant
The other step is to see a professional consultant who primarily works with debt reduction cases.
Back to seeing if you qualify for debt consolidation: A 4 Pillar debt consultant will work with you to see if you qualify. But that’s not all they’ll do; they also provide guidance and support – they’ll help you tailor a budget and a repayment plan that works for you. They also provide ongoing support and advice and will refer you to appropriate professional for more specific services.
