How to Consolidate Debt in Canada

Are you tired of catering for so many small debts? Isn’t it dead boring to rush from one pay desk to the other and always worry lest you might miss the working hours of this bank or that credit card company? Have you ever been penalized for missing a monthly payment, which you missed not because you did not have the cash to make it, but simply because you forgot its due date? If the answer to these questions is ‘Yes’, maybe it is time for you to sign up for a debt consolidation program, which will give you the convenience and peace of mind to cover all you previous debts with one single monthly payment.

The good news is that virtually all big banks and credit companies in Canada offer debt consolidation loans as part of their debt management and consolidation programs. While there are many debt consolidation options, one of the best is offered by the Royal Bank of Canada (RBC), one of the five biggest banks in the country.

According to the credit experts of RBC, efficient credit management boils down to making sure you have the right borrowing options that fully meet your unique financial needs. By consolidating the different borrowing options they are currently using, they make it a point that borrowers can quickly and, more or less, conveniently wipe out all their debt and save hundreds of hard-earned dollars on interest payments in the process.

RBC Royal Bank offers specially-tailored fixed and variable rate personal loans. A fixed loan can help the borrower increase his or her net worth by paying off their debts faster. The main difference between the two options is that the interest rate of the first type of personal loans is fixed for the whole period and borrowers will remain unaffected if the main interests rate rises meanwhile. At the same time, the interest rate of variable rate loans fluctuates with the bank’s prime rate, enabling borrowers to save money when interest rates fall. The monthly payments on the loan are hardly likely to go up if interest rates rise, but its amortization period will grow longer to make up for the higher rates.

You may use RBC’s secured and unsecured credit lines to consolidate your outstanding debt, the main difference between the two being that the first credit line is secured with the equity of your real estate and thus gives you, as a borrower, access to higher credit limit. The second option is more flexible and it also has a competitive interest rate based on your credit score.

You may also consider the debt consolidation option offered by the Bank of Montreal. Borrowers may choose between personal loan and home equity loan plan. With the personal loan plan, you will know the amount of your payments over a set period of time. You may choose between variable and fixed interest rates, and decide on your repayment period (between 1 and 5 years). With the home equity loan plan, you get a fixed rate, borrowing up to 75 percent of your home equity. You may spread the payment over a 25 year period in manageable payments.



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