Many people are facing problems related to their debt conditions. These types of people borrow various types of funds for different purposes such as; study loan, credit card bills and so on. They always face problem when the repayment time begins. In this situation, they are required to pay money to different institutions. They are searching for financial tools by which they can make the repayment of loans much easier. The debt consolidation Vancouver is that financial tool. From the upcoming paragraphs, you are able to get beneficial information related to debt consolidation.
Ways to calculate interest rate
Everyone wants to borrow funds at low-interest rates by which the value of installments is less. If you are choosing the way of debt consolidation then the interest rate is calculated on the basis of two main factors. Now I’m going to explain those factors such as;
Credit Score: Credit score completely depends on the credit history of the consumer. The financial transactions those are done by you in bank account affect the credit score. If you are paying the installments properly then your credit score may be better. From better credit score financial institution get that he/she can easily repay the loan without any type of problem. As a result, they charge less interest rate otherwise you are liable to pay interest at high rates.
Collateral: Collateral is the asset of borrower that is offered by him to financial institution. This thing makes the debt consolidation secured loan, in which you are getting loan by providing guarantee. This guarantee is in the form or asset, type and value of asset affect the interest rate decision. In case, you are failed to paying the installments as re-payment of the loan then institution uses collateral in order to get back their money.