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Debt consolidation… it’s not a dirty word

What’s the first thing you think of when someone says ‘debt consolidation’?  Trouble… or, you can’t pay your bills…cashflow problems… We probably all think there is some financial problem..

Sure, that’s the popular reaction…and who can blame us for thinking that way with the recent media hype about Personal Debt concerns…  One day we have an article saying that Personal Debt levels are high or increasing… The next day, Canadians are conservative and managing our debts well.  This flip-flop would confuse anyone.  click here for some articles from earlier this year.

But debt consolidation can actually be a good thing most of the time…  And that time is now.  You’ve heard of ‘buy low and sell high’… Well in credit, you ‘borrower when rates are low to save high amounts of money’…

With record low interest rates it makes sense to borrow….If you own a home, have some equity and have some non-mortgage debt, such as credit cards, a car loan, a student loan, a line of credit, etc…  These debts probably carry a higher rate of interest than what you could get through a mortgage…  Debt Consolidation is a smart thing….paying less interest puts money in your pocket.

Here’s a good calculator to figure out how much you can save…DEBT CONSOLIDATION CALCULATOR.

Use these rates for comparison…Mortgage rates are well under 4.00% today… a 5 year fixed rate is somewhere around 3.59% and Variable rates are around 2.25%…  compare this with 12% to 18% credit cards, 6% lines of credit, 7% car loans, etc… Rolling these debts into a mortgage is not a bad thing, it’s a smart thing.   Paying less interest just makes good financial sense.

And as always, speak with someone who knows and understand financial matters… talk with a qualified Mortgage Broker or Financial Planner….

Steve Garganis View All

As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.

One thought on “Debt consolidation… it’s not a dirty word Leave a comment

  1. Hi James,

    Thank you for the comments… I have only ever written my own articles but am open to new ideas…my concern is that I am focusing on the Canadian Consumer and you are from the U.S… not sure your articles will be relevant for my readers….

    Steve

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