7 Ways To Consolidate Debt Without Hurting Your Credit Score

The cost of living these days is getting higher and higher. On the other hand, the income of most of us is not really keeping up with the rising cost of everything. In this case credit cards are becoming popular.

 But with credit cards though there is an added problem of you being in debt. Now normally a person in Canada may hold two to three credit cards. The consolidated debt that these credit cards could generate can become a headache in only a matter of few months.

Therefore, this good read has covered some of the best strategies of debt consolidation Montreal.

Let’s check out!

Debt Consolidation Strategies Without Hurting Your Credit Score

Now the whole process of consolidating of Debt is you just pay one consolidated amount for all your credit card bills.

1. Family and Friends matter

The first thing you can do is ask for money from your family and friends. It is advisable that you take small amounts from every family member or friend and use this money you get to just pay off the credit card bills.

 There will be no interest on loan as it is from a family member or a friend but money can destroy relationships, so be careful.

2. Take a personal loan

The second way is that you can take a personal loan from the bank to pay off the credit card bills. But to get this loan your overall credit and financial status should be good and you should always have a steady source of income before taking this loan.

If you spend the loan money on something else you will end up in even deeper waters then you are in presently.

3. Loan from special services

While the above option is safe, getting a bank loan is not so easy. In comparison, getting a loan from some special debt consolidation service is much easier.

Having said that, the best debt consolidation loan in Montreal is offered by the company goPeer. They offer a loan of up to $25k at an interest rate of 8% APR.  

4. Loan against asset

The third way is that you can take a loan against your house, vehicle or any other assets you own.

Again, even though this is instant money but you should be aware that if you are not able to pay back down the EMI for your asset then you can lose it for forever.

5. A card for a card

The fourth way is that you can take up a new credit card to pay off the old credit card bills. This method is extremely risky and we will only recommend it if you are a very good money saver.

If you are a spendthrift then do not even consider this plan.

6. Retirement fund

Now the situation we are talking about can be eased a bit if you have a retirement fund plan with loan facility. The loan you get from this is taken out of your retirement fund plan money.

Thus, if your situation is really desperate, then only go for this option. Or else your retirement will also be messed up.

7. Get a credit counselor

The best way, by far is getting in touch with a credit counselor. The job of a credit counselor is take up your bills and make it into one. You pay a fixed amount to the counselor every month and he/she will pay the credit cards bills.

A credit counselor will also talk to your lenders and work towards reducing the interest you pay. This last option is the most risk free as you won’t have to take a fresh loan to pay off the debt accumulated by your credit cards.   

At A Glance

if you are covered in debt till your neck, then consider the above options. We highly recommend the last option as it is also recommended by a number of people who have successfully paid off all their debts. Paying off your credit card debts using the ways mentioned above will also allow you to maintain a good credit score.

Ellen Hollington

Ellen Hollington is a freelance writer who offers to ghostwrite, copywriting, and blogging services. She works closely with B2C and B2B businesses providing digital marketing content that gains social media attention and increases their search engine visibility.