Start Consolidating credit lines

Consolidating credit lines

In this case, a bank would usually lend you up to maximum black book value of your vehicle (the “black book” is a database of very conservative vehicle values.

So if you ask your bank for a debt consolidation loan of $20,000, but your net worth is only $20,000, they will probably decline your request.

They may be able to give you a $2,000 unsecured loan (10% of your net worth), but not much more.

If you have any other valuable asset like a boat, motorcycle, RV, mobile home, non-RRSP mutual funds or piece of property, your bank may be able to use one of these assets as security as well.

One thing to be careful about with a debt consolidation loan is that many people in Canada try to obtain consolidated credit payments in order to resolve their financial problems and get out of debt.

If you do choose to go this route, you should make sure that you try to pay off this extra mortgage as quickly as possible and don’t do this very often.

If you find yourself doing this every year or two, that means that you are spending more than you make, and it is going to take forever to get your mortgage paid off at this rate.

If a relative lends you money, but then you lose your job or get hurt and are unable to pay them back, that may sour your relationship with them.