Debt Refinancing: New Challenges?

Debt Refinancing: New Challenges? - Infographic

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People work hard to get to a point where they can take on a certain amount of debt comfortably. Unfortunately, new challenges like an unexpected layoff or injury can come along and make it difficult to repay that debt. Bad credit mortgages in Toronto can make it easier to refinance any type of debt, be it your original mortgage or even credit card debt, and help you get back to where you want to be.

Reasons Why People Refinance Debt

There are many different reasons why people take out poor credit loans in Toronto. They include:

  • Refinancing credit card debt. Often, the payments on high-interest credit cards become too much of a burden and people struggle to make ends meet.
  • Getting a lower monthly mortgage payment. New challenges in your income or employment status might make your mortgage payments too high for your budget. In this case, refinancing can help you obtain a smaller payment over a longer period.
  • Preventing bankruptcy. In extreme financial situations in which people consider bankruptcy, refinancing may be a viable alternative. Some Toronto second mortgage companies will allow you to refinance all of your debt and roll it into one smaller monthly payment.

Why You Should Refinance Credit Card Debt

One of the biggest challenges people face these days is credit card debt. Imagine that you get two credit cards with a very respectable 12% interest rate, and you make your payments on time for the first few years. Then, all of a sudden, you get laid off from your job and you miss a couple of payments. Your interest rate skyrockets to as much as 25% or even 30%, and you suddenly find yourself unable to make even the minimum payments – even when your income goes back to normal. The best idea involves getting poor credit loans in Toronto to pay off all of that debt, cancel the cards, and then make a lower monthly payment to your financier.

Why You Should Refinance Your Mortgage

Getting behind on your mortgage is scary and stressful. Although many Canadian banks will work with you to an extent, missing too many payments puts you at risk for foreclosure - and you could lose your home. If you still have an income of some sort but you can no longer afford the same monthly payments, you still have options. You can attempt to negotiate with your lender to refinance your mortgage, essentially spreading out the rest of the loan balance over a longer period to reduce your monthly payments. You can also get poor credit loans in Toronto in some cases when your bank will not approve the refinance due to credit or income issues.

When you find yourself falling behind and getting into debt due to new challenges in your life, there are still options. A Toronto second mortgage or private loan can help you get back on your feet, avoid foreclosure, and stop worrying about high interest rates and bills you cannot afford to pay.

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