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Financial counselling has become a general method of dealing with debt but might not be the proper solution for people to administer their debt. In most cases individuals will seek out debt consolidation loans to pay off their unsecured debt and start with a new slate. even though this takes care of the momentary problem it constantly causes bigger issues later on in life. The reasons why this happens are;.
First off, individuals are creatures of habit. By applying for a debt consolidation loan you’re only avoiding the original problem, your habits. Although a consolidation loan will repay your primary debt it doesn’t deal with your spending habits. Usually People applying for consolidation loans to pay off their debt end up with twice the debt they began with.
This being the other reason consolidation loans won’t pan out. Once individuals pay off their debts it gives them access to available funds, causing the trap to start over again. Usually individuals end up with their un-secured debt at the limits again, as well as, the consolidation loan that they borrowed to pay off their debt. The most common comment I hear as a debt manager is “I want to acquire a consolidation loan to repay my debt”, “I dont want to use unsecured debt again”. In theory this is terrific but often times doesn’t happen
Greg Martin
Financial Counsellor
Phoenix Credit and Debt Counsellors
Debt Consolidation Canada