You are then left with only one outstanding loan — to the financial institution.In addition to streamlining your debts into a single payment, a debt consolidation loan may also offer you an interest rate that is lower than that charged by your creditors saving you money in interest charges.Most provinces abandoned the Orderly Payment of Debts program because non-profit credit counselling organizations were doing a good job serving the public with their Debt Management Programs.
The overall lower interest rate is an advantage of the debt consolidation loan offers consumers.
Lenders have fixed costs to process payments and repayment can spread out over a larger period.
The first thing you should know is that no government in Canada – federal, provincial, or municipal – officially approves any debt consolidation program.
Any company making this claim is embellishing what they are selling and are doing so using a misleading claim.
In most cases, the financial institution will settle all the debts for you and, in return, the only monthly payment you will have to make will be to them.