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These organizations do not make actual loans; instead, they try to renegotiate the borrower’s current debts with creditors. The Internal Revenue Service (IRS) does not allow you to deduct interest on any unsecured debt consolidation loans.If your consolidation loan is secured with an asset, however, you may qualify for a tax deduction.By consolidating your debts, you'll have only one loan to pay and one number to track, making it easier to create a realistic repayment plan.Before you consolidate your debts, you should have a clear understanding of your spending patterns.Theoretically, debt consolidation is any use of one form of financing to pay off other debts.
Do your own credit card math with this calculator courtesy of the Financial Consumer Agency of Canada If you've built up debt with a few different lenders, it may be hard to stay on top of your payment due dates and track your progress (or lack thereof).
“Typically, the loan has to be paid off in three to five years,” says Harrine Freeman, CEO, and owner of H. Freeman Enterprises, a credit repair and credit-counseling service in Bethesda, Maryland, and author of “How to Get Out of Debt.” These types of loans don’t erase the original debt; they simply transfer all your loans to a different lender or type of loan.
If you need actual debt relief or don't qualify for loans, it may be best to look into a debt settlement rather than, or in conjunction with, a debt consolidation loan.
If you're like most Albertans, you're probably borrowing from a few different companies—like a credit card company (or two), car loan provider, and bank.
These lenders are likely charging you different interest rates, and depending on your type of debt, these rates can be well into the double digits.In 2016, the average Albertan owed ,583 in credit cards, lines of credit, student loans, and other personal loans.