Debt Consolidation FAQs

Debt consolidation can be an excellent way to pay off high interest debt, improve your credit score, and help save you money!

What is Debt Consolidation?

Debt consolidation refers to the act of taking out a new loan to pay off other liabilities and consumer debts, usually with more favourable terms such as a lower payment, lower interest rate- or both!

How can I get a lower payment and interest rate if I’m taking out a bigger loan?

If you’ve been paying off higher interest loans and debts for a while, your credit score has likely improved- and finance rates are lower now than they’ve been in recent years- making it an excellent time to take advantage of financing.

What can I use debt consolidation for?

Debt consolidation can be used as a tool to deal with a great deal of debts- Primary examples include student loan debt, credit cards, and other liabilities.

How can I consolidate my debt?

There are a few ways to consolidate your debt, but VIDrives recommends doing it with a vehicle loan. An auto loan is a secured consolidation which makes it easier to obtain, and allows you access to lower interest rates, lower payments, and longer terms- which allows you to pay off your debts sooner. Either by dropping your payment and allowing more of your income to go towards paying off debts, or a lower interest rate- allowing more of your payment to go toward the principal of your debt.

To help understand your debt better- check out other posts on www.vidrives.ca/blog