Debt & Borrowing Money: Victory Bonds

On November 11, red poppies will remind Canadians of the fallen soldiers. These soldiers sacrificed their lives in times of battle.  Remembrance Day is also known as Armistice Day. It marks the World War I peace agreement of 1918 signing between Canadian allies and Germany at Compiègne, France. Remembrance Day commemorates the victory of the 60,000 Canadian military men and women who fought to defend their country and then defended its ideals. Canadian’s led the forefront by using a new way of financing war efforts.

They raised funds for the Nazi Germany war using Victory Bonds. World War I (WWI) Victory Bonds enabled the Canadian government to borrow money from Canadian citizens to finance the country’s mounting war debt. Then patriotic bond campaigns made consumers buy war bonds. The efforts surpassed projected funding expectations. Victory War Bonds were the most effective method of raising money for incurred war debt.  But, borrowing money to pay off debt is not a concept exclusive to the government during war times. Debt consolidation loans allow consumers the ability to borrow money as a loan to pay off personal debt.


Consumer Debt

Consumer debt is also known as personal debt. Purchases made with borrowed money or credit have variable or fixed terms/rates attached. The variables include interest rates, APRs, and GDP.  Banks, the federal government, or credit unions are the institutions that lend consumer loans. Consumer debt is a combination of two forms of debt accrual. They are:

  1. Revolving Debt: The debt is from credit. You pay down monthly revolving debt payments based upon how much you spend. These are credit cards and lines of credit.
  2. Non-Revolving Debt: The debt/loan is presented in a lump sum with fixed payments already predefined. These are mortgage payments, car notes, and school loans.

Canadian household debt ratio has increased. Statistics report Canadians having $1.77 of debt to every dollar generated for disposable income. To calculate the debt-to-income ratio (DTI), use the amount of money a person generates monthly and their debt. Overall, it is a percentage based upon your income and is divided by your total consumer debt.


Borrowing Money To Pay Off Debt

Many Canadians opt to borrow money to pay off debt.  The debt solution enables the ability to pay off multiple revolving credit lines using a single monthly instalment. Firstly, there are multiple determining factors for loan consideration. But before you borrow money using a consolidation loan to pay debts, be sure you understand the terms.  A high debt-to-income ratio can result in you living paycheque to paycheque. If you think it is time to consider available debt-relief options, learn how paying down your debt today can help free up your cash flow for tomorrow. Call one of our trained credit counsellors at (844) 202-2175 or visit our free online debt analysis.

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