If the deadline indicated in your statement of the account seems unrealistic to you, here are some solutions to put an end to it much more quickly with this felt frustration and this balance which refuses to decrease.
Judith, a client, was surprised when it was explained to her that she could save $ 5,972 in interest on paying off her credit card with a $ 10,000 balance by negotiating a decrease in the interest rate from 19% to 12%. Why hadn’t her bank offered her, she wondered? It should be noted that if she had been able to obtain a loan at the rate of 9%, she would have saved $ 7,589 in interest and reduced to 14 years the period of repayment initially envisaged of more than 21 years.
By making more than the minimum payment
you can substantially reduce the time required and the interest and end the balance on that credit card that you had adopted for too long!
Eliminate credit insurance and other periodic costs
charged on your credit card. The real usefulness of these fees is often questionable. However, before you act, consult an expert to assess your family’s true insurance needs.
Avoid making cash advances
on a credit card, because the interest is calculated from the 1st day while many institutions charge a higher rate for cash advances than purchases.
Would you like to know the impact of a rate cut or an increase in your payments? Nothing easier! A simple and confidential tool.
Are you unable to reduce your cards within a time that is acceptable to you? You could then consider other solutions, such as a consumer proposal or even bankruptcy.
HOW DO LOANS, SECOND CHANCE CREDIT AND CAR LOANS WORK?
How do auto loans work?
What are the criteria that determine an interest rate and what is the impact on financing and the interest rate when we have a bad credit report, a consumer proposal or bankruptcy ?
Have you recently inquired about a car loan and wondered why the interest rate is so high? You should know that the interest rate offered to a consumer is in direct correlation with his credit report. This is why after a consumer proposal or bankruptcy , you have to allow yourself time to rebuild your file and regain the confidence of creditors.
Why is interest so high when we have a bad credit history or after insolvency?
You are considered a higher risk customer given your credit history, consumer proposal, or bankruptcy . So the creditor protects himself by charging a higher interest.
The debt ratio allowed is less flexible than for someone with a good credit history. So the lower your debt ratio, the more advantaged you will be.
The more favorable your payment history, the more interesting the offered rate will be, despite your consumer proposal or your bankruptcy . So keep your accounts up to date.
In addition, following information received from a financial institution, the number of insolvencies could also influence the interest rate offered.
Some advice before applying for a 2nd chance credit loan:
Build a New Positive Credit History: After your bankruptcy or consumer proposal , get a credit card with a security deposit or with an endorser. This card can be an asset because it is new information on your credit report. It will therefore be rated R-1 and it will suffice to maintain a good payment history for this card to help your credit score improve.
Monitor the impact that the interest rate has on your loan and the monthly payment on your budget. For example, if you buy a vehicle that is worth $ 5,000 at a rate of 18% you will pay only $ 2,618.20 in interest. It might be better to wait and improve your credit history so that the rate is better. And don’t be fooled by a longer amortization, yes the monthly payment will be reduced, but the interest cost will be increased!
Check out our articles on your credit report to start improving your credit score now for a great interest rate.