Are you struggling to stay on top of your debts? If so, you’re not alone. In a recent survey, we found that 10.3 million Canadians are stressed out about the amount of credit card debt they’ve recently incurred. And, like you, they’re looking for solutions to manage their payments and take control of their finances. That’s where debt consolidation loans can help.
These types of loans are typically used to pay off smaller, high-interest debts all at once so that you end up with one easy low-interest payment. Whether you need debt consolidation in Winnipeg or Brandon, find out what your options are, where you can find a loan and what you need to qualify.
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The main reason why Manitobans would consider debt consolidation is that it allows you to combine all of your debts into one manageable monthly payment, ideally with a lower interest rate. The idea is that you take out one big, low-interest loan in order to pay off all of your smaller, high-interest debts. A debt consolidation loan usually has to be paid back with monthly repayments over a set amount of time, like 1-5 years.
Example: Liam has $12,000 of credit card debt and needs debt consolidation in Winnipeg
Liam lives in Winnipeg and is carrying a balance of $5,000 on one credit card and $7,000 on another credit card (both at 20% APR). He decides he wants to be debt-free in 3 years. In order for that to happen, Liam would have to start paying a total of $445 per month on credit card repayments. By the end of the 3 years, he would have paid $4,067.41 in interest.
Liam instead searched for a debt consolidation loan in Winnipeg and found one at 9% APR over a 3-year term. His total monthly payments would then be $381.60, with only $1,737.48 going towards interest. So, by opting for a debt consolidation loan, Liam would end up saving around $2,329.93.
Before Consolidation
After Consolidation
Balance
$12,000.00
$12,000.00
Interest rate
20%
9%
Year(s) to pay off
3
3
Monthly payment
$445.00
$381.60
Total interest paid
$4,067.41
$1,737.48
Total balance paid
$16,067.41
$13,737.48
What loan options are available for debt consolidation in Manitoba?
Secured loans.Secured loans are the most risky type of debt consolidation loan. This is because you have to put up an asset like your house or car to “insure” your payments. If you can’t pay on time, your lender can sell your asset to reclaim its money.
Unsecured loans.These loans are less risky for borrowers, but often come with higher interest rates and require a good credit score. You won’t need to put up an asset to secure your payments, but your credit score will go down if you default on your loan.
Guarantor loans. If you don’t have the best credit score, you can ask a family member or friend to cosign your loan. They may be able to get you a better interest rate as well.
How to compare debt consolidation loans
If you’re ready to start shopping around for debt consolidation loans in Manitoba, there are a couple of things you should look for:
Low interest rates. You’ll want to compare at least three or four lenders to find the right loan for you.
Longer term. If you’re already struggling to repay your debts, it could help to get a longer term with smaller monthly payments.
Best repayment terms. Check with your lender to find out how flexible it is with due dates and lowering or adjusting payment amounts.
Easy eligibility. If you have a low credit score, it can help to take out a bad credit loan to help with debt consolidation.
No fees. Most loans won’t come with additional fees and charges, so you should keep shopping if a lender asks you to pay extra.
Simple application. Look for a lender with a quick and easy application process to avoid excess paperwork.
Good customer service. Find a lender that has good online reviews and a strong reputation for customer service.
How can I apply for debt consolidation in Manitoba?
It depends on which lender you go through, as each one will have a different process. However, most lenders will require you to follow a couple of basic steps:
Check your credit score. You should double-check your credit score before you apply for a loan to make sure you qualify. This is because every time a lender checks your credit it will lower your credit score (whether you qualify or not!).
Fill out your application. Be prepared to hand over your personal and banking info through an online or in-person application.
Verify your ID and income. You’ll need to verify who you are and how much money you make before you can qualify. This can be done with a government-issued ID and documents like your pay stubs or tax returns.
Other options for Manitobans struggling with debt
Government subsidies. The Manitoba government provides funding through its Employment and Income Assistance program as well as Rent Assist.
Borrowing from friends or family. Your friends and family might be able to help you out with a loan if you’re struggling with bad credit.
Debt settlement. You may be able to get the amount you owe reduced if you look at debt settlement. It will cause your credit score to go down though, which can lead to problems if you want to borrow money in the future.
Low-interest credit card. You may be able to transfer your credit card debts onto a 0% introductory balance transfer rate or get a card with a lower interest rate to cut down on high APRs.
Debt relief. A debt relief company can help you understand what debt relief options are available to you, help you to create a plan to get out of debt and connect you with your lenders to settle your debts as quickly and smoothly as possible.
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Frequently asked questions about debt consolidation in Manitoba
If you default on your loan, your credit score will go down. You also risk losing any collateral you put up to secure your payments.
Yes, there are many options if you opt for debt consolidation in Winnipeg. Most debt consolidation loans Winnipeggers will find offer interest rates of 2-47% on loans of $200 up to $50,000, depending on factors like the type of loan you get and your credit history. Loan terms typically range anywhere from 6 months to 5 years.
In Manitoba, most lenders require you to be at least 18 years old, with proof of continuous employment and an active chequing account.
No. Government-issued debts (like student loans), as well as mortgages and vehicle loans, aren’t eligible for consolidation in most cases.
It depends on your financial situation. If you can pay back your loans but are missing payments because you have too many debts, then a debt consolidation loan could help. If you don’t have enough money to afford your payments, then you might look at other alternatives like debt settlement.
Claire Horwood was a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee. See full bio
Chelsey Hurst is a publisher at Finder, specializing in banking and investments. She loves empowering people to avoid financial pitfalls and make better decisions with their money. Chelsey has a Bachelor of Science from Redeemer University, a Master of Science from McMaster University, and has won multiple awards for research communication. In her spare time, Chelsey enjoys cooking and taking long walks in nature. See full bio
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