Should You Borrow Money To Get Out Of Debt?
When you start falling behind on bill payments, creditors’ collection activity can become relentless. This is when you might consider borrowing to get out of debt, but it’s when you should be very careful.
It is very important to look closely at the payment terms, interest rates, payment periods, the monthly payment amount, and the overall repayment amount. You want to ensure that you are able to save money, not lose more.
Here are a few signs that borrowing might be a bad idea:
The interest rate on your new loan is higher than the rates on your current debts;
The amount you will be re-paying is significantly higher than your overall debt load;
The new monthly payment is too large for your budget;
You don’t qualify unless you have a co-signer;
The collateral for the loan presents too much risk;
You are emotionally vulnerable;
You are making a rush decision.
Any loans that are “easy” to obtain and don’t require a credit check, often have very high fees and interest rates, which can easily lead to more debt instead of resolving existing debt problems.
Take the time and consider all of your options before making a decision. Our Licensed Insolvency Trustees offer free consultations and can review the pros and cons of all of the options with you so you can make an informed decision about the best debt solution for your circumstances.
Start your journey to financial freedom. Book your free, no obligation consultation today to connect with one of our experienced BC/Yukon Licensed Insolvency Trustees (LITs).
