When it comes to financial stability then we all take it very seriously but current economic conditions are bit shaky. This means if you are not smart enough then you will remain struggling with your debts throughout a life. Now is the right time to search for best bad credit personal loans Toronto. This will not only help you to make your life debt free but also improve your credit ratings efficiently.
However, there are still a few essentials that you should learn about before reaching towards debt consolidation in Toronto. Following is a small advisory session of financial experts who will tell you what you should look for and what must be avoided to get the best deals in bad credit personal loans in Toronto.
Advice on debt management
Facing hard time with increasing cost of living? Struggling with bad credit? These are some questions from which most of the people suffered a lot everyday but with experts advice on debt management you can apply for bad credit personal loans in Toronto. This option is specifically designed for debtors like you who are facing tough financing issues.
But before taking out any debt solution or finalising any lender always consult the expert and take their advice on debt management solutions and risks.
Key points on debt consolidation loans
* Bad credit debt consolidation loans are developed for those debtors who are suffering from bad credit debts and need help to pay off their debts.
* Under this loan system all the multiple individual debts are consolidated and are pay off by borrowing one large sum from financing institutions.
* These loans are of two types; secured consolidation loan and unsecured consolidation loans.
* Secured debt consolidation in Toronto is backed by collateral. In this category lenders generally consider a real property (house) as collateral. It offers large sum of loan on lower rate of interest.
* Secured loans are easily available in the market as it minimizes the risk of the lender by offering collateral.
* Normally applicants of secured loan negotiate their interest rates because they are offering their house as security to lender. But in this case applicant acquiring consolidation loan with bad credit takes away their freedom of negotiation.
* Unsecured debt consolidation in Toronto are not backed by any collateral and offers small borrowing with high rate of interest.
* These loans are not easily available in the market especially if you are suffering from bad credit. Somehow if you manage a lender of unsecured adverse credit debt consolidation loan then he/she will charge higher interest rate than normal.
You can get loans cheaper than a personal loan. Here are four such loans.
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Hello and welcome to FundooMoney, your 24X7 buddy for all your money matters. Personal loan is an unsecured loan with no collateral backing the loan to guard against repayment default. That is the reason they come with high interest rates. Many people fall upon personal loans during emergencies or to bridge a gap in their own funds for occasions such as marriage in the family. The good news is that there are loans backed by your investments as collateral, that can be cheaper alternatives to personal loans. We will provide you the details shortly, so stay tuned.
As we just mentioned, there exists many lower cost loans provided you can provide your investments as collateral. They provide loan rates which are much lower than those of personal loans. In financial industry parlance, they are called loans against assets. Here is a primer on them.
Loan against fixed deposits (FDs)
If you have a fixed deposit (FD) and the required loan amount is less than your FD investment, opt for a loan against FD. You will get up to 90% of the FD amount as loan. The interest charged will not be stressful to your finances since it will be just 1-2% above the FD interest rate. So, for a FD paying 9% annually, the loan against FD is likely to be at 10-11%, much lower personal loan interest rates. The other great thing about loan against FD is that the loan gets processed very quickly, if you approach the same bank which issued the FD.
Loan against gold
If you have gold jewellery lying idle and to which you are not emotionally attached, you can get them to work for you by taking a gold loan against them. The rate of interest for this loan would be much lower than the personal loan rate. Private lending institutions such as non-banking finance companies (NBFCs) offer quick disbursal while banks offer a lower interest rate. So, you may like to approach a bank for better interest rate and repayment flexibility.
Loan against financial securities
If you have investments in the form of shares, mutual fund units, bonds, National Savings Certificate (NSC), life insurance and others, you can get a loan against these securities at interest rates lower than interest rates for personal loans. Typically, lending institutions such as banks offer upto 50% of the value of these securities as loans.
Loan against your car
Yes, you heard it right! You can get a loan against your car provided it is not older than 5 years. Even though the interest rate charged on this loan is typically higher than other secured loans, you may get a deal where the interest rate is lower than the personal loan interest rates.
We hope you found this useful. Are there other lower cost alternatives to personal loans? Do share with us and others on the channel, your tips by writing in the comments section. For more such actionable personal finance information and regular uploads, subscribe to our channel. Also, visit our website, download our mobile app and stay connected with us on Instagram, Pinterest and Slideshare.
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