Debt Consolidation Questions

Why would I choose Debt Consolidation?
What are my eligible debts?
Does this affect my credit rating?
How do I qualify?
What if I don't qualify?
Are there any costs involved?
What if I can't make the payments?
What happens to my credit cards?

Why would I choose Debt Consolidation?

Consolidating your debt is a good choice for those who have a satisfactory credit rating and income deemed high enough to pay back their debt in full. Individuals with higher debt, a lower credit rating or low income should consider pursuing a Consumer Proposal or Bankruptcy.

What are my eligible debts?

As this is not a formal legal process, you choose the debts which you would like to pay down with the new consolidation loan.

Does this affect my credit rating?

Depending on how quickly you take action and begin paying off your debt, debt consolidation should have little or no effect on your credit rating. However, late payments, failure to make minimum payments, or being sent to collection can negatively affect your credit rating. The longer you wait to repay your outstanding debt, the more your credit rating will be negatively affected.

How do I qualify?

In order to qualify for debt consolidation, you must have a satisfactory crediting rating and income deemed high enough to sustain the loan. The financial institution issuing you the loan will conduct an assessment to determine if you meet their criteria.

What if I don't qualify?

If debt consolidation isn't a viable option for you or if you were rejected for a consolidation loan, there are several other options available. It is always best to talk to a professional to find out which solution is right for you. Visit our debt calculator to see which choice is the best for you or contact an MNP office or your local MNP Trustee for more information.

Are there any costs involved?

There may be a fee involved to open a file for your consolidation loan, in addition to regular loan payments.

What if I can't make the payments?

If you suddenly lose your source of income, and are unable to pay your consolidated loan you may need to explore other options such as a Bankruptcy or a formal Consumer Proposal. For more information, contact an MNP office or ask a MNP Trustee to find out which solution is best for you.

What happens to my credit cards?

The institution that granted your consolidated loan may close any credit cards or lines of credit you have to make sure that you don't continue to accumulate debt. This decision is made by financial institution providing the loan.

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