Opt for debt consolidation
Applying for debt consolidation is a solution whereby a financial institution grants you a loan. This loan will only be used to pay back your other creditors in full.
In person, by phone or video conference
What is debt consolidation?
Debt consolidation is a solution to debt in which a financial institution grants you a single loan. This loan allows you to reimburse your other creditors.
All your payments are therefore grouped into a single monthly payment, which is repayable over a maximum period of 5 years. The interest rate will generally be set at 12% (which should be considered a negative aspect of this type of debt solution). Furthermore, there will be no impact on your credit file, unlike a consumer proposal or personal bankruptcy.
In the event that the financial institution refuses to grant you a loan or the monthly payments do not fit within your budget, a consumer proposal may be a very interesting alternative.
You will need to prove to the financial institution that you have the ability to repay the loan on a monthly basis, in addition to covering your living expenses. If you want to know the maximum amount you could afford to repay your debts based on your current expenses, please use our monthly budget calculator.
Our Process
Debt consolidation is a complex process. Our team will assist you through the entire process.
We establish a clear and structured plan
We take care of debt consolidation
We help you restore your credit score
Debt consolidation: Is it for me?
If you answer yes to any of the points below, debt consolidation may be the solution to your situation.
- Do you have a surplus every month after paying your current expenses?
- The vast majority of your debts have an interest rate of more than 12%?
- Do you have a stable job and a good credit history?
Here are the profiles of people who consult with M. Roy & Associés and obtain a consolidation loan as a solution to their debt:
- They have a good enough credit history to obtain a consolidation loan (debt-to-income ratio of 40% or less – check out our Debt-to-Income Calculator to find out yours);
- They have a permanent full-time or part-time job with a stable income;
- They are able to make payments on a loan equivalent to 100% of their debts, plus 12% interest;
- The majority of their debts have an interest rate of 12% or more.
To find out if debt consolidation is the best solution for your situation or for any other questions regarding your finances, do not hesitate to call 1-877-123-4567. You can also complete the online form to schedule a confidential and free meeting with one of our team members.
Are you concerned about finances?
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Questions and Answers on Debt Consolidation
Debt consolidation involves taking out a loan from your financial institution. This loan allows you to pay off all of your creditors with a single loan, rather than managing several small loans each month and often only paying the minimum required amount.
Debt consolidation can be a wise option if the interest rate on your consolidation loan is lower than the interest rate on your current debts.
This type of loan usually has an interest rate between 12% and 14%. If you have credit card or store balances to pay off with rates of 19% to 29%, for example, debt consolidation is a great choice. In the opposite case – a personal loan at 7% interest or a line of credit at 9% – it would be better to consider another solution.
Make sure you can afford to make the monthly payments required to repay the loan. It is essential to establish a monthly budget.
Finally, if your financial institution requires a cosigner to grant you a consolidation loan, think twice. If you are unable to repay the loan, the institution will turn to the cosigner for payment of the outstanding balance and this situation can create friction.
Debt consolidation is a loan that you take out with a financial institution to consolidate all your debts into one loan. First, you must:
- Check the interest rates on your debts. Make sure that all debts to be consolidated have an interest rate that is higher than the interest rate of your consolidation loan (between 12% and 14%). The goal is to reduce your expenses, not increase them.
- Ensure that you will be able to make the monthly payment that the financial institution requires. There is no point in consolidating if you will still have difficulties after the intervention. To find out if you would be able to handle such a payment, create a budget.
- Make sure the financial institution does not require a co-signer (endorser). If they do, it means they have doubts about your financial ability. The last thing you want is to have someone close to you pay off your debts.
Here are 4 criteria on which you will be evaluated when applying for a loan:
- A good credit score (R-1 or R-2) for each creditor;
- A total score of over 680;
- A debt-to-income ratio of less than 40%;
- Stable employment.
Late payments on your past debts remain on your credit report for 6 years. Although they weigh heavily on your score, the longer the time passes, the less the impact is significant. We recommend always checking your credit report before applying for a loan to ensure that it does not contain any errors that could harm your application.
We also strongly advise calculating your debt level yourself using the debt-to-income ratio tool. This will allow you to learn more about your financial situation. A debt-to-income ratio above 40% is a sign of over-indebtedness, which requires debt reduction measures.
One of our financial recovery advisors can determine the cost of a debt consolidation loan during your first consultation.
For over 75 years, we have been helping individuals and businesses regain control of their finances. Contact us to get back on track!
