Debt Consolidation

Consumer debt is a highly contradictory part of our finances: it’s common and incredibly personal. Most Canadian adults owe money in some way, shape or form, yet what this represents can vary drastically from person to person. To some, a debt might signify a significant accomplishment or progress toward a large goal. To others, it might be a constant reminder of a time of crisis or hardship. The decisions that lead us to borrow can be thoughtful, deliberate, rushed, and misguided.

No matter how unique one’s situation is, there are some universal truths to borrowing money: it costs money to borrow. Therefore, its repayment should be a top priority. Whether you’re comfortably chipping away at a mortgage, dreading your monthly student loan payments or recovering from a credit card purchase you couldn’t afford, the following provides some helpful tips that address and correct unhealthy attitudes surrounding debt.

 
Steps for Making a Repayment Plan

1. Start by listing all you owe - credit card, medical, student loans, etc. You’ll need to know the balance, interest rate and minimum payment for each.
2. Total your minimum payments, then define an additional amount for loan repayment (choose an amount you can realistically afford, but don’t be skimpy).
3. Choose a repayment strategy to structure your plan. Popular techniques include the Snowball method (sorting your debts from lowest balance to highest balance), the Avalanche method (sorting your amounts owning from highest to lowest interest rate), and Consolidation (taking out a new loan to pay off other debts, then repaying that one loan). Each strategy has pros and cons, so a little research will come in handy in determining which approach best suits your circumstances.
4. Using your repayment strategy as a guide, create a prioritized list of what to pay off first.
5. Each month, pay the minimum balance on all your loans except for the one at the top of your list—that one gets the minimum payment plus the additional funds you determined in Step 2.

That’s it! As you sequentially pay off your debts, you’ll have more money to apply to the next one on the list. Repayment requires action, some discipline and a lot of patience. Having a plan helps track progress and keeps you from getting discouraged. If you need additional assistance building your repayment plan, contact Sunrise Credit Union to learn about your options.

One of those options is debt consolidation and a loan from Sunrise Credit Union. Debt consolidation combines two or more debts into one monthly payment. People consolidate debt for many reasons; it can simplify their life and finances, ease stress, save money by lowering payments, and enable them to pay off debt faster.

Feel use to use the loans calculator below to see if a consolidation loan is an option for you to reduce you loan payments and leave more money in your pocket.