Lethbridge Debt Consolidation Loans
Sometimes it seems like there is more month than money. Bills can pile up, whether you fell behind with late fees or had to charge an unexpected expense like a broken furnace or a transmission failure. This is on top of regular expenses like the mortgage, groceries, utilities and taxes. The literal cost you pay may increase over time due to increasing interest rates and compound interest. It may seem like there is no end in sight. Yet there are several possible solutions.
Earn More Money
There are two variables in your financial equation: income and outgo. If you can take a few extra shifts each month, work overtime, or start a second job, that’s greater. Unfortunately, many of us don’t have this luxury. Family obligations and personal constraints may make it impossible. You also run the risk of spending more money in the process, negating the value of that additional income. For example, you may end up working for nothing after taking childcare, travel costs and additional taxes into account.
Spend Less Money
If you can reduce your expenses while keeping your income constant, you’ll have more money to work with. You can save that money in an emergency fund so that you can pay for unplanned expenses out of pocket instead of adding it to your debt load. Or you can use this extra money to pay down your debt. Yet this isn’t as easy as it seems. People waste time trying to make homemade cleaning supplies but won’t cancel loot box subscriptions, meal kits and other little luxuries. Others cut their expenses for a while and then reward themselves in a way that wipes out the savings. You have to get on a budget, and more importantly, stay on a budget in order to end up making financial progress.
Spend Less on Debt Payments
This solution will reduce how much you pay every month, but it doesn’t require sacrifice and struggle on your part. However, a Lethbridge debt consolidation loan does require some work on your part. You’ll need to talk to a Lethbridge mortgage broker like Whalen Mortgages Lethbridge to learn how you can refinance unsecured debt into a loan secured by your home. This could be a home equity line of credit, a second mortgage or a refinance of your current mortgage. The interest rate on a loan secured by your home will be lower than unsecured debt.
There are risks to this approach. If you’ve been overspending, refinancing your debt into a larger home loan or a second mortgage will not change your spending habits. Refinancing a Lethbridge mortgage to take cash out to pay off existing debt will end your obligation to annoying debt collectors, but you’ll run into problems if you can’t make the new, higher house payment. Make a budget, and use the extra money you get every month to create an emergency fund or pay off your debt instead of treating it like a financial windfall.
Yet there are a number of benefits to consolidating all of your debts into a single payment. You only have to keep track of a single, larger bill. The way the mortgage is structured will force you to pay it off over the next few years. Yet the total monthly payment will be lower than you’re currently paying, because it is amortized over 10 to 25 years, depending on the loan. A Lethbridge mortgage broker can help you shop around for a more competitive interest rate, and there is little effort on your part. This is far simpler than trying to negotiate a lower interest rate with your current creditors, and it is much less stressful than filing for bankruptcy. Make the house payment on time every month, and your credit score will improve.