Are you one of the three Canadians who aren’t able to pay their credit card bills in full each month? Do you sometimes get overwhelmed trying to figure out the minimum payment for each bill? Are you stressed because the minimum is too much?
If you do have multiple debts and credit cards on the go, an option that might work for you is debt consolidation. What that means is you roll your high-interest debts, such as multiple credit card payments with various interest rates, into one single payment at one rate. Preferably, you’ll get a loan that will allow you to pay less interest & less money each month.
However, Rob Brown tells us in his book, Wealthing like Rabbits, that debt consolidation isn’t for everyone, and it doesn’t take care of all debt problems!
Questions to Ask Yourself
The first major question you need to ask yourself: Is debt consolidation right for me?
This isn’t an easy one to answer for many of us, and it has a lot of layers to unpeel before you can really know.
- Have you figured out what the REAL problem is? Sometimes, debt consolidation sounds appealing because we’re overwhelmed and haven’t sat down to do our homework. Make sure you’ve completed a budget and uncovered any of your bad habits that are contributing to your stress.
- Have you shopped around? Debt consolidation loans are offered by many companies, and it’s up to you to find the one that is the best fit for your finances.
- Have you used a debt consolidation calculator? When it comes to anything with our money, we need to know the exact dollars and cents, but this is especially true with debt consolidation!
- Have you considered your credit score? Depending on your situation, your credit score might take a hit when you consolidate your debt (but that might also be worth it). Check out this blog by Loans Canada.
Get your copy of Wealthing Like Rabbits
Learn more about managing debt by reading Wealthing like Rabbits! We’ll give you a complimentary special edition when you sign up to be a member of The Village!