The average debt service ratio — the amount required to pay just the interest on all debt payments — varies widely across Canada. As a debtor’s debt service ratio increases, the amount of money left to spend on other goods and services decreases. As of 2021, Statistics Canada reports that New Brunswick residents enjoy the lowest average debt service ratio in Canada, with approximately 4.24 percent of their disposable income each year used to keep their debt interest payments current.
Yet this figure does not tell the whole story. Residents of the province may have the lowest average debt ratio, but since the average Canadian household’s disposable income is roughly $28,000, the average New Brunswicker spends over $1,200 on interest alone each year. This sum does not include the principal payments that are also paid on those debts.
In New Brunswick, debt consolidation is one of the most popular methods for lowering the interest rate on debt. The purpose of debt consolidation is to combine all existing debts into one loan that has a lower interest rate than the average rate paid on existing consumer loans, credit cards and so forth. Getting the best interest rate under a New Brunswick debt consolidation loan typically requires the debtor to have excellent credit. Individuals with poor credit will find it harder to lower their average interest rate. In fact, the rate might even increase if they go through the consolidation process.
Debt consolidation loans in New Brunswick may leave you with a lower interest rate and a lower debt payment each month, but if you really want to pay off what you owe quickly, you may be better off getting debt settlement help. Good debt settlement programs are available even to residents with poor credit, and in a settlement, you will see your principal reduced as well as your interest rate. You will owe less money overall, which means you can get your debt under control much quicker.
Fill out this online debt relief form for more information on your debt relief options and find out which option is best for your specific situation.