Consolidate and minimize interest
What if you're not in a position to pay off your existing debt? In this case, your goal is to pay as little interest as possible. A key strategy is converting high-rate debt into lower-rate debt.
For many consumers, moving credit card or higher-rate debt into a personal line of credit is a good option. The interest rate on a line of credit is usually significantly less than the rate on most credit cards. If the line of credit is secured by marketable assets (for example, your home or investment portfolio), the rate might be 1 or 2 percentage points lower still. For homeowners, the CIBC Home Power Line of Credit® allows you to use the equity in your home to secure a loan or line of credit and get an even better interest rate. A line of credit can be a convenient source of cash. You don't have to apply for a loan every time you need money.
For example, a Personal Line of Credit is a flexible borrowing solution that can be accessed whenever you need money, with interest only paid on the amount you use - and only for the amount of time you need to use it.
To explore other smart debt management strategies, please contact a CIBC advisor.