Tag Archives: federal
Student Loan Consolidation
Student debt consolidation is the process of consolidating several types of loans into one debt. This results in reduced monthly payments- which results in a lot of saved money in the long run. Consolidation loans will have fixed rates- giving you an added benefit on saving to recover your debt.
Such services can be obtained by American Education Services consolidation- or AES for short. You can save up to 50% on your bill with this service- a very good value indeed. ACS consolidation is also available- and is much like AES in terms of how it works. Federal consolidation and Network consolidation also work in nearly the same way- giving you many choices. Not only can you save a good deal of money on your bill- but you get the added benefit of having just one bill a month- not several. This can reduce stress and let you route your energy to other problems, instead of worrying about which bills you should pay.
You can generally choose debts that will last 10- 30 years generally. You may get lower payments, but the total amount to be paid will be higher in the long run. It has been debated as to whether the government should allow such consolidation among the Federal consolidation service only. This would put some banks and companies at a loss, such as the AES consolidation or ACS consolidation, but may be better for students in the long run. Federal consolidation has a very good rate- and is often better than banks or other companies can do. You will also not encounter hidden fees or tricks- making Federal consolidation an easy choice. This isnt always the best way to go- as some companies actually do have lower rates. But make sure you get a second opinion before you decide on anything for certain.
With such consolidation, you can lower you monthly payments. However, you will want to debate the decision, as you will end up with 10- 30 years worth of debt to be paid. The consolidated debt into one bill can be less stressful, but often this is a small benefit when considering long term effects. You may wish to pay separate bills and have the freedom of paying off your student debts as fast as you can- certainly much faster than 10-30 years worth of debt.
If you are looking into student loan consolidation- make sure you look at your options first. Rushing into student loan consolidation can put you into a huge debt that will take you many years to recover from. If you are on the verge of bankruptcy, or desperately need the money, consolidation is the best choice for you- but keep in mind you will be paying your decision off for many years to come. If you are looking to simplify paying your bills, this is probably a bad choice- and this decision shouldnt be taken lightly. You should talk to a consolidation broker, or ask help with your bank for more information to see if this is right for you.
Debt Reductions Companies in Canada – Do Your Due Diligence
When making a big ticket purchase like a vehicle, you do your research right? You check the history of the vehicle, ensure it has not been in accidents, learn about the ownership, check the maintenance record for the vehicle and more. Your personal finances are no different and if you are in financial trouble, before choosing a company to help you, you really should do the same kind of research.
“The banks are offering a program that’s about to run out” or “time is running out on Federal Government Programs”; sound familiar? Debt reduction companies are spending hundreds of thousands of dollars on advertising per/year to sell you on this message. The question is; is it true? And do they “really” help? Is there really a program that all of the banks collaborated on and is time running out? Is it true that the Federal Government programs that help Canadians get out of debt could end in the near future? And what do they do anyway? Let’s get to the bottom of it.
First of all; all of the banks have not gotten together to offer a debt reduction program, hence time is not running out; because it simply isn’t true. The only Federal Government programs that help Canadians deal with debt are administered under the Bankruptcy and Insolvency Act (BIA). The Federal Government has made no announcement that there is a plan to eliminate the BIA legislation and there is no other Federal Government program that we are aware of that helps Canadians get immediate, legislated, debt relief. Seeking debt relief under the BIA does not mean that you have to go bankrupt and Federal Government programs are a viable means to get out of debt when a financial crisis emerges. The BIA offers different remedies to deal with debt, but the principal program offered by debt reduction companies doesn’t even involve relief under the BIA.
Debt reduction companies collect money from you on a monthly basis over a period of years with a promise that in the future they will settle your debt. By way of contrast, debt consulting companies represent you and provide you with a range of options to deal with debt that could include a consolidation or even enrolment in a credit counselling or Federal Government program. Debt reduction companies have one primary goal and that is to collect your money on a monthly basis. This is where the money that they use to advertise to you comes from. The Financial Consumer Agency of Canada (FCAC) recently issued a consumer alert about debt reduction companies; you can view the alert here http://news.gc.ca/web/article-eng.do?nid=649969.
Before you deal with a debt reduction company, do your due diligence. While writing this article we took some simple steps that any consumer who has access to a computer can take to research a company; the results really scared us.
We visited the first debt reduction company’s website and there were many red flags. First, there wasn’t any information about the company’s ownership. Are they Canadian? American? Who is their president and what does he or she stand for. The company publishes no information about their ownership whatsoever. Red flag 1!
We Googled “who owns [company name]” and nothing came up. Red flag 2!
We went to Linkedin and ran a search by company name to see how many professionals on Linkedin are employees of the debt reduction company. The only profile that came up was an individual page branded for the company – not one employee and not a single name of anyone associated with this company emerged as a result. You would expect that a company that bills itself as a national provider of debt reduction services would have at least one employee with a profile on Linkedin; the world’s largest professional networking site. We would liken this to you not knowing a single person who has a Facebook account. Red flag 3!
Finally, we searched “[company name] reviews” and on the first 3 pages of Google we found no less than 6 pages by companies who represent people and individuals themselves who reported very serious claims about this debt reduction company. Red Flag 4!
Don’t believe everything you hear! Ads are paid for by the advertisers, companies pay the BBB to be members and any company who doesn’t wilfully and publicly provide information about their corporate structure and ownership, may not be a company you should commit to paying hundreds of dollars per/month for years to come. When it comes to debt reduction companies do your due diligence.