Knowing When Your Debt is Too Much

Although the recession in Canada has ended, many families are having problems with growing debt and the inability to pay for it.

Many Canadians are over 90 days late on the credit payments with the sharpest rates of delinquencies in credit card payments and sales finance purchases.

“For those getting calls from collection agencies about the new fridge they couldn't quite afford, talk of an economic recovery is pointless. Debt problems are difficult to face, but need to be addressed well before you reach the critical phase of bankruptcy. When you find yourself struggling to keep up with the minimum payments on your credit cards, it may be time to explore debt consolidation.”

Debt consolidation allows you to make one payment at a lower rate rather than multiple payments at higher rates. This helps to reduce the amount of time it takes you to get debt free.

It is also important to know the difference between a secured and unsecured loan. Although a secured loan normally has a lower rate, if you are unable to pay, you will lose the asset you used to secure the lower rate. That means you could be out a car or a home. In an unsecured loan, you do not need to worry about that.

You can read the full article at The Globe and Mail.