Published 14 Sep 2022

RenFi Debt Consolidation Loans-Complete Resource Guide

Do you have difficulty managing multiple monthly debt payments or maybe you are struggling to pay off your debts? If yes, this article will help you understand what a “RenFi Debt Consolidation Loan” is so that you can make an educated financial decision.

Paying off one's debts is never easy. For those with credit card debt, overdue bills, and student debt, it can be a challenge to pay off the remainder of their debt, especially for those with a low income. 

To that end, more and more Canadians are turning to debt consolidation companies to help them consolidate their debts into a single, manageable monthly payment and, as a result, save themselves a substantial amount of money on interest.

To help you decide whether a RenFi Capital Debt Consolidation Loan is the right approach for paying off your debt, we've put together this comprehensive resource guide to help you better understand what debt consolidation is. 

It is our goal to help educate and inform our fellow Canadians of the various aspects of debt consolidation loans and we hope that by the end of this guide, you will have a greater understanding of what RenFi Capital debt consolidation loans are, how to apply, and why you should consider them. Keeping in mind, the main objective here is to save you money on interest, create better cash flow and help you get out of debt faster.

NOTE: Most debt consolidation loans are unsecured personal loans (which can be used for any purpose). However, some lenders, , will allow you to secure a loan with your car title, stocks, real estate, collectibles, or other valuable property. That being said, the intended focus of this guide will be on secured personal home loans backed by RenFi Capital. Unlike other debt consolidation companies, RenFi Capital specializes in secured personal home loans for consumers to pay off any high-interest debt.

Table of Contents:

1. What Is Debt Consolidation?

2. How does Debt Consolidation work?

3. Why Choose Debt Consolidation?

4. Types of Debt Consolidation

- Secured Debt Consolidation Loans

-Unsecured Debt Consolidation Loans

-Secured vs. Unsecured Debt Consolidation Loans

5. How do RenFi Capital Secured Debt Consolidation Loans work?

6. Why Choose RenFi Capital Debt Consolidation Loans?

7. How to Apply for a Debt Consolidation Loan with RenFi Capital?

8. Debt Consolidation Loan-Frequently Asked Questions

What Is Debt Consolidation loan?

A debt consolidation loan, sometimes called a bill consolidation loan, is a financial strategy that combines or “consolidates” multiple high-interest loans into a single low-interest loan, used to pay off outstanding debts. It simplifies and saves money for consumers who have multiple unsecured obligations, such as credit cards, medical bills, or personal loans. Often, this type of loan is ideal for consolidating high credit card balances or high loan balances.

Typically, a lender will give you a debt consolidation loan to help you streamline your debt repayment procedure. That being said, if approved, an unsecured personal loan provides consumers with access to additional money—up to $50,000—as well as a reduced interest rate and a single monthly payment to your debt consolidation loan lender. These loans often have repayment terms ranging from 2 to 10 years, depending on the amount borrowed. To that end, while a debt consolidation loan will not eliminate your debt entirely, it will simplify your finances, allowing you to save money on interest payments in the long run and enhance your cash flow.

How Debt Consolidation loan Works

A debt consolidation loan is a type of personal loan that works by consolidating different types of debts or liabilities into one payment. Many lenders, including traditional banks and peer-to-peer lenders, such as RenFi Capital, provide debt consolidation loans as part of a payment plan to borrowers who are struggling to manage the amount or size of their outstanding debts. These types of loans were particularly developed for consumers who desired to pay off several high-interest loans over a longer loan term.

If you are approved for a debt consolidation loan, the proceeds will be used to pay off any high-interest debt you might have. You will then owe one low-rate balance on whatever the new loan amount is. Simply put, debt consolidation provides you with a fresh start by allowing you to pay off your debt faster. It eliminates late payment penalties and interest charges, leaving you with a single loan to repay with a low-interest rate.

Moreover, while some lenders may provide specialized debt consolidation loans, most standard personal loans can be used for debt consolidation. Similarly, some debt consolidation lenders will pay off debts on the borrower's behalf, while others will distribute the proceeds so that the borrower can make the payments directly. 

IMPORTANT NOTE: Keep in mind that if you have a low credit score or blemishes on your credit report, you may be denied an unsecured debt consolidation loan. As of March 2021, rates for debt consolidation loans range from 6% to as high as 36%, so even if you are approved, your rate could be so high that it may not be the ideal choice when compared to what you presently pay.

Why Choose Debt Consolidation loan?

If you have multiple credit card accounts or high-interest loans and wish to simplify or reduce your expenses, you may want to consider whether a debt consolidation loan makes sense for your financial situation. Debt consolidation is an excellent tool for consumers who have many debts with high-interest rates or monthly payments, particularly those who owe $10,000 or more. By taking a debt consolidation loan, you can profit from a single monthly payment rather than many installments, as well as a cheaper interest rate.

Debt consolidation becomes useful when you are able to secure an overall lower interest rate by combining your debts together. This enables reduced payments and frees up funds that you can either use to make larger payments, save, or invest. Ultimately, debt consolidation can help you save on interest payments, coordinate and manage your monthly payments, as well as reduce your monthly payments to a more feasible sum.

That being said, here we will go through the benefits of this popular financing tool to help you determine if debt consolidation is the best option to pay off your loans.

Obtaining a debt consolidation loan is advantageous in the following ways:

1. Streamlines Your Finances

Consolidating many outstanding loans into a single loan decreases the number of payments and interest rates you have to manage at a single time. Thus, saving you more each month on interest. Specifically, when the rate of your debt consolidation loan is lower than the rate of your current debt, which is usually the case.

2. Simplifies Debt Repayments

A debt consolidation loan requires the borrower to make a single low-interest monthly payment to the lender, instead of managing multiple separate debt payments each month. It may also reduce the number of collection calls consumers receive from various creditors. Thus, it makes it easier and less stressful for customers to manage their debt.

3. Accelerated Payoff

With a debt consolidation loan, you can pay off your debt faster. Provided that the interest on your debt consolidation loan is lower than the interest on individual loans and you use the money you save on interest to pay down your loan. However, keep in mind that debt consolidation often results in longer loan terms—so you'll have to make a point of paying off your debt early to take advantage of this benefit.

4. Lower Interest Rates

A debt consolidation loan can help consumers save money by lowering their overall interest rate. It does this by repaying high-interest debt with a larger, lower-interest loan. However, it’s important to note that some types of debt have higher interest rates than others. Therefore, consolidating debts on a single personal loan may result in a lower interest rate on certain debts and higher interest rates on others. In this case, it’s best to focus on the total savings.

5. Reduces Monthly Payment

When you consolidate debt, your overall monthly payment is likely to decrease since future payments are stretched out over a new and perhaps longer loan term. While this might be favorable in terms of providing that much-needed breathing room and monthly budgeting, it also means that you may pay more throughout the life of the loan, even if the interest rate is lower.

6. Improved Credit Score

When you apply for a new loan, your credit score may temporarily drop due to the hard credit inquiry. However, debt consolidation may help you boost your credit score in a variety of ways once approved. Considering that paying off revolving lines of credit can lower the credit usage rate indicated on your credit report, ideally, your usage rate should be less than 30%. Moreover, making consistent, on-time payments—and eventually paying off the loan—can also help you boost your credit score over time.

Types of Debt Consolidation

If you’re looking to borrow money to help reduce the number of monthly payments you make and, as a result, save yourself a ton of money on interest, chances are you’ve already started to look into the different options available to you. To that end, debt consolidation loans are a popular choice amongst many Canadians, and they come in two main forms—secured and unsecured.

In short, secured loans require you to put up material assets, such as your home or vehicle, as collateral in case you are unable to repay your loan, whilst unsecured loans enable you to borrow the money outright (after the lender considers your financials).

In this section of the guide, we will discuss the differences between these two types of loans. This will help you to gain a better understanding of the role each of these types of loans plays while making it easier for you to determine which is best suited for regaining control of your financial situation.

Secured Debt Consolidation Loans

If you own a house, a secured personal loan may be your best borrowing option. Provided that, you can borrow more money (up to $150,000) than you could with an unsecured personal loan. A bigger loan may be preferable if you are consolidating significant credit card or loan amounts. Furthermore, secured loans have lower interest rates and loan installments. This allows you to manage your debt more efficiently.

That being said, secured debt consolidation loans require collateral and are used to consolidate other existing debts. Mortgages and vehicle loans, for example, are the most popular types of secured borrowing. However, in the event that the borrower is delinquent with payments, the loan agreement gives the lender the authority to seize the asset designated as collateral. The upside is that the collateral will allow you to obtain a larger loan at a lower interest rate than your credit and income would typically allow.

After consolidating the existing loans, the borrower still owes the same amount of money. However, they are left with a single monthly payment. Interest may also accrue more slowly. Additionally, secured loans are also considerably easier to qualify for and often offer lower interest rates since they pose less risk to the lender.

When would you apply for a secured loan?

  • Large-scale home improvements
  • Significant debt

NOTE: If you are unwilling to lose your collateral in the case of a default, a secured loan may not be worth it. Furthermore, if you can't acquire an APR that's much lower than the rates on your previous loans, it's probably not worth it.

Unsecured Debt Consolidation Loans

The vast majority of debt consolidation loans are unsecured personal loans (which you can use for any purpose). If you are not a homeowner and want the freedom to pay off your loan whenever you choose, an unsecured loan is a good alternative for you. With an unsecured loan, you may borrow up to $25,000 while still making modest payments that meet your budget.

These loans don’t require any collateral or security on behalf of the borrower and are used to pay off other existing debts. This implies that if you are unable to repay the loan, the lender will not be able to take or repossess your assets. To that end, unsecured loans have higher interest rates and lower qualifying amounts than secured loans, since the lender is more likely to be repaid.

Thus, for unsecured debt consolidation loans, the lender is counting on you to repay the debt. This is also why your credit score is crucial. Your credit ratings indicate your payback history and the chance that you will repay your debt. To that end, if you have a good credit score, you may be able to acquire an unsecured loan (no collateral necessary) from a bank or credit union at a reasonable interest rate. However, even if you have solid collateral, you will not be able to qualify for a low-interest rate loan if your credit score is too low.

When would you apply for an unsecured loan?
  • Debt consolidation to pay off debts or credit cards
  • Prepare for unanticipated emergency bills.
  • Home improvements
  • Car maintenance and repairs

Secured vs. Unsecured Debt Consolidation Loans

There are several factors to consider when deciding between a secured and an unsecured loan. Before you decide anything, it’s best to understand the criteria of each. Here are some key differences between the two, as well as the advantages and disadvantages of each loan to consider.

Secured LoanUnsecured Loan
AvailabilityA collateral asset must be available.No collateral is required.
Borrowing LimitsYou get increased borrowing limits.
Lower borrowing limits may not be adequate for your needs.
Credit ScoreEligibility is determined by credit score and financial health. However, they may be more accessible if you have terrible credit.Eligibility is determined by your credit score and financial health, but you'll normally need strong or exceptional credit to qualify for the most attractive loan conditions.
Eligibility CriteriaLess rigorous since the lender accepts less risk.More rigorous because if you default on the loan, the lender has no rights to the collateral.
Interest RatesIt is usually much lower due to there being less risk involved for the lender, who places a lien on your assets.The risk is usually greater since the lender cannot recuperate their losses if you fall behind on payments.
PenaltiesYour collateral may be seized, and your credit score may suffer as a result.Missed payments will be collected, and your credit score will suffer as a result.
Loan TypeDebt consolidation, Equity take out, Renovation loansUnsecured credit cards, school loans, personal loans, payday loans, medical bills, utility loans, and lines of credit.

How do RenFi Capital Secured Debt Consolidation Loans work?

Loan Amounts: $25,000-$150,000

Loan Term: 12-24 months

Homeownership Required: Yes

Customers Use : Debt consolidation, unexpected expenses, home repairs, and more.

For those who are struggling with debt on a low income, RenFi Capital debt consolidation can help you combine several existing debts into a single, reasonable monthly payment. Rather than paying high-interest rates, you can opt for a RenFi Capital secured debt consolidation home loan to pay off the remainder of your debt, with rates starting at as low as 0.75% monthly.

RenFi Capital secured debt consolidation home loans are a smart solution to regain control of your financial situation, with a 3-minute application process, 15-minute approvals, and 72-hour funding. If approved, a RenFi Capital secured debt consolidation loan works by allowing you to borrow as little as $25,000 or as high as $150,000 to pay off any high-interest debts, leaving you with a single monthly payment to your debt consolidation loan lender (RenFi Capital).

All RenFi Capital debt consolidation loans are secured personal loans granted on home equity with a 12-month term and are open loans repayable after three months with no penalty. This means that upon taking out a RenFi Capital loan, it will be secured as either a first or second mortgage on your home as collateral. Providing that, using your home as collateral makes it easier for us to provide you with a larger loan to pay off your outstanding debts with a lower interest rate than your credit standing and income would normally permit.

Moreover, following the conclusion of your term, RenFi Capital professionals will assist you in refinancing your loan with your initial mortgage lender That being said, RenFi Capital can also assist you in obtaining a new first mortgage or renewing your loan. It's entirely up to you!

Why Choose RenFi Capital Secured Debt Consolidation?

RenFi Capital is the lender for all submitted loans, meaning we can approve and finance your loan quickly! If you are a homeowner struggling with debt and need relief, RenFi Capital debt consolidation provides consumers with the perfect financial solution to simplify and reduce their existing debt, all while saving them tons of money on interest each month. Also, because all of our debt consolidation loans are secured home loans, securing a loan with RenFi Capital is easier and offers greater payouts, lower interest rates, and lower monthly payments.

What's more, RenFi Capital secured debt consolidation loans, unlike traditional debt consolidation loans, do not require onsite appraisals or document submissions such as bank statements, mortgage documents, or tax documents, in order to get approved. Additionally, our patented onboarding approach, which includes no onsite appraisals, a seamless application process, and an entirely secured digital experience that is 100% secure and confidential, allows us to eliminate the hurdles that slow down the loan process. As a result, after only 15 minutes, we may can your loan application and fund you within 72 hours of completing your 3-minute online application.

To that end, when you choose a RenFi Capital secured debt consolidation loan, we're with you every step of the way, from start to finish. That means we'll be there for you from the moment you apply all the way through funding, servicing, and the end of the loan term! But don’t just take our word for it. Rather, take a look at the multiple reasons why you should choose a RenFi Capital secured debt consolidation loan, and make the decision yourself.

They are as follows:

  • Streamline Application Process
  • No Onsite Appraisals or Document Submissions (bank statements, mortgage documents, or tax documents) Required
  • Rates As Low As 0.75%
  • Consolidate Up To $150,000
  • Up to 24-Month Terms
  • Repayment After 3 Months - No Penalty
  • 3-Minute Application Process & 15-Minute Approvals
  • Fully Funded in 72 Hours
  • Instant Income Verification Straight from Your Bank.
  • 100% Secured Digital Experience
  • Fixed Rate for Monthly Payments

How to Apply for a Debt Consolidation Loan with RenFi Capital?

Our seamless application process is designed to make applying for a secured debt consolidation loan easier and stress-free. It’s important to note, however, that RenFi Capital debt consolidation loans are secured as a second mortgage on your home. Therefore, in order to apply, you or the co-applicant need to be the registered owner of the property that will be used as collateral.

That being said, upon starting the application process, all you need to do is provide us with the name and amount of the debt that you are looking to pay off, and we will take care of the rest. At this point, we will analyze the information provided in addition to assessing the value of your home in relation to the size of the loan, as well as your credit score and overall debt.

Follow these three easy steps to apply for a debt consolidation loan with RenFi Capital today.

They are as follows:

Step 1: 3-Minute Application Process

Step 2: 15-Minute Approval Process

Step 3: Approved Funding Amount

Once this has been completed, we will email you the necessary closing documents and instructions which can be signed via Docu-Sign.  

NOTE: To keep your personal information secure and private at all times throughout the application process, the experts at RenFi Capital use software called “Inverite,” which uses 256-bit bank-grade encryption. This software sends us a read-only copy of your bank account, so you don't have to submit us bank statements, T4s, employment letters, or pay stubs.

Debt Consolidation Loans–Frequently Asked Questions?

Does debt consolidation hurt your credit score?

A debt consolidation loan might temporarily harm your credit when your lender does a credit check during the application process. Additionally, rolling over existing debts into new ones may initially have a negative impact on your credit score. This is because credit ratings prefer loans with longer, more consistent payment histories.

However, because the debts you consolidate will be declared paid, a debt consolidation loan will eventually help to improve your credit score. Furthermore, every time you make complete, on-time payments, your credit score will improve. Thus, ultimately, a debt consolidation loan helps by reducing your debt-to-income ratio and improving your cash flow.

How do I combine all my debts into one payment?

Applying for a debt consolidation loan with RenFi Capital is the ideal method to combine all of your existing debt into a single, affordable monthly payment. With a RenFi Capital secured debt consolidation home loan, you may pay off any qualified high-interest debt up to $150,000.

When should I consider a debt consolidation loan?

The best time to consider a debt consolidation loan is when you are able to attain an overall lower interest rate by grouping your obligations together. This enables reduced payments. This frees up funds that you may either utilize to make greater payments or save or invest.

What types of debt can I consolidate?

Often times, the easiest loan to combine is credit card debt. However, any unsecured debt, including medical bills, payday loans, lines of credit, utility bills, or college loans, can also be consolidated.

Can I get a debt consolidation loan with bad credit?

Unfortunately, the likelihood of obtaining a debt consolidation loan is close to nil. Lenders use your credit score and payment history to determine your potential risk. To that end, if your credit history indicates a pattern of inconsistent payments, your lender will likely see this as a red flag and, as a result, be less willing to put up the money. 

However, if you can offer security through a secured loan or have a strong co-signer the lender will be more inclined to grant you funding. That being said, it's important that you fully understand the interest rates and fees before agreeing to a consolidation loan with bad credit. Provided that, a low credit score may result in extremely high-interest rates, negating the purpose of obtaining a debt consolidation loan in the first place.

With a Renfi Secured Debt Consolidation Loan, you can get approved with bad credit. The reason for that is that Renfi looks at multiple factors when deciding on approving a loan. We look at income/debt ratio, equity in your home, and your future credit score after you consolidate your debt.

Are there ways to consolidate debt with a low income?

If you have a low income and want to consolidate your debts to save money and gain convenience, you have numerous possibilities available to you. They are as follows:

  • Debt Consolidation Loans
  • Balance Transfer Credit Cards
  • And Low-Interest Credit Cards

 What is the best type of loan to pay off debt?

The best type of loan to pay off your debt is a RenFi Capital secured debt consolidation loan. Provided that, all of our debt consolidation loans are secured personal loans, which provide higher payouts, lower interest rates, and cheaper monthly payments. Furthermore, unlike typical debt consolidation loans, RenFi Capital secured debt consolidation loans do not require onsite appraisals or document submissions such as bank statements, mortgage paperwork, or tax records to be authorized. This makes it faster and easier for you to get approved.

Can I pay off a debt consolidation loan early?

The simple answer is yes. The beauty of acquiring a RenFi Capital secured debt consolidation loan is our no penalty, early repayment terms. All RenFi Capital secured debt consolidation loans have a 12-month duration and are pre-payable after three months with no penalty. This makes it easier for you to get out of debt faster.

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