How Debt Consolidation Becomes the ‘Never, Never Plan’ | DFI30 | Ep. 423. Did you know that bankers often refer to debt consolidation loans as a ‘never, never plan,’ meaning the borrower will never become free of their debts? This may sound odd since consolidation loans often make total debt cheaper to service through a lower interest rate. But banks know how to keep their clients with just the right amount of debt to continue profiting from interest charges. On today’s podcast Ted Michalos and Doug Hoyes breakdown just how exactly banks keep their customers in a ‘never, never plan,’ and offer practical advice to help borrowers actually eliminate their debts. Tune in!
Links:
Risks of Debt Consolidation Loans – The Hidden Traps: https://www.hoyes.com/blog/debt-consolidation-loans-the-hidden-trap/
Hoyes Michalos Debt Repayment Calculator: https://www.hoyes.com/debt-repayment-calculator/
Hoyes Michalos Debt to Income Ratio Calculator: https://www.hoyes.com/debt-to-income-ratio-calculator/
Government of Canada Credit Card Payment Calculator: https://itools-ioutils.fcac-acfc.gc.ca/CCPC-CPCC/CCPCCalc-CPCCCalc-eng.aspx
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pros and cons of debt consolidation
what if you're a responsible homeowner who didn't over leverage or use home as an ATM, but still lose your job plus dealing with refinancing mortgage at a higher rate? what i learned in the 08 crash that eventually whipped me out in 2011, causing me to lose my home, savings is that you don't come from money, or don't have enough cash to weather several years or half of decade of bad economy, you will eventually get whipped out.
125 BPS minimum rate hike by end of 2022, plus a deep recession and we'll be back to 2017 prices for detached homes in Southern Ontario by end of 2023. Good luck to all the over-leveraged, negative cash flowing, and underwater speculators ? For all the responsible homeowners who didn't over leverage and use your home as an ATM, you'll be fine.