There are several different ways that consumers in Canada can access funds and borrow money. While bank loans are the most common option, people throughout Canada can also turn to the choice of a line of credit.
While a line of credit typically offers a lower interest rate than a loan, there are essential factors before considering this option. It can be easy to misuse a line of credit, resulting in the risk of increasing your debt. Debt consultants such as 4 Pillars offer services to help those who fall behind in payments on their line of credit, credit cards, loans, mortgages, or other types of debt.
How Lines of Credit are Approved
Financial institutions consider applications for a line of credit similar to the criteria used for a loan. They need to have information on your income, current debt, and they also review your credit report.
These factors determine the interest rate and the amount approved for a line of credit. Depending on the type of line of credit requested, it may be secured or unsecured. Once approved, there is no limitation on how the money is used. However, interest is charged from the time money is used from the account. Monthly payments on the balance will vary based on the interest rate and the balance of the line of credit currently in use.
Many people that come into 4 Pillars with issues in repaying a line of credit meet the qualification criteria, but then experienced additional debt, loss of a job, or even unforeseen medical issues, or other situations.
A 4 Pillars debt consultant provides you with information and options for managing debt on your line of credit and other outstanding balances.