Get Rid of Debt for Good in the New Year

For this blog post, we teamed up with Fairstone, a responsible Canadian lender with almost 100 years of lending experience.

There’s no better feeling than a fresh financial start. If you’ve had trouble getting rid of debt in the past, it might be time to consider a different approach: debt consolidation.

With debt consolidation, your existing debts are combined (credit card balances, unpaid bills, loans, etc.) and then paid off using a consolidation loan. Your outstanding balances are zeroed, and rather than managing multiple payments and payment schedules, you’re left with a single loan and one monthly loan payment.

How much debt can I consolidate?

With Fairstone, you can take out a personal loan between $500-$50,000 to consolidate debt. For higher debt amounts, you can speak to a Lending Specialist online or at your local Fairstone branch.

Will I save money with debt consolidation?

When you pay off outstanding debts with a consolidation loan, not only will you experience the relief of one manageable loan payment and a fresh start to your finances, but you could also save money. Consolidating debt means you’ll:

• Bid goodbye to accruing interest charges, which are tacked onto your balance owing each month

• End late payment fees, which also increase your balance monthly

• Possibly take years off your repayment schedule – especially if you’ve been making minimum payments on a revolving credit product like a credit card – saving you the costs of borrowing

Before a debt consolidation loan

For example, let’s say the total amount of debt you’re carrying is $18,500 – but each bill has its own interest rate, payment amount, payment deadline and time to pay off.

After a debt consolidation loan

With consolidation, you’ll take out a loan for $18,500, pay off the old debts, and are left with one monthly payment at a set payment amount each month – less to remember, and the old debts are cleared away.

In the example here, you could save $264 a month and be debt-free in half the time it would take without a consolidation loan.

What credit products can be used for debt consolidation?

You can use a variety of credit products to consolidate debt, including:

• Unsecured personal loan – An ideal loan for borrowers who don’t own a home, or who are looking for flexibility to pay off their debt consolidation loan any time. At Fairstone, unsecured personal loans range from $500-$25,000. 

• Secured personal loan – Ideal for homeowners looking to borrow money at a lower interest rate. At Fairstone, secured personal loans range from $5,000-$50,000. 

• Line of credit – If you have room available on your personal or home equity line of credit, you can use these credit products to consolidate outstanding debt. However, since a line of credit is open-ended (no loan term) and a revolving credit product (with only minimum payments required), you will not benefit from the stable payment structure of a personal loan.

If you’re looking to get rid of debt for good in the New Year, particularly if you’ve found debt repayment to be challenging in the past, this is your year to consolidate debt. Break cycles of minimum payments and begin to build your new financial future.

Apply for a Fairstone loan

Ready to get started? Apply for a Fairstone loan in 3 steps:

1. Get a loan quote

2. Find out how much money you could qualify for in minutes

3. Have your money as soon as today

Completing a loan quote won’t impact your credit score and there’s no obligation to take out the loan. In addition to finding out how much money you could qualify for, you can find out what your loan payments might be.

**Illustration only. Monthly payments shown are minimum payments. Payments would change over time based on balance and payment history.

***Rate and amount apply to secured personal loans. Rates may vary. Complete a loan application for personalized results.