What to consider
A smaller payment can mean a longer repayment period and greater total cost.
Who can help?
Banks, credit unions and other authorized lenders. This describes a provider type, not a confirmed DebtHelpers partner.
Questions to ask
- What is the total cost including fees?
- Will my existing balances actually be paid off?
Your debt consolidation reading guide
Start here, then explore the specific questions that matter to your situation.
- Debt consolidation loans: pros and cons in Canada
- Consolidation loan declined? Other next steps in Canada
- Debt consolidation vs a debt management plan in Canada
- Consumer proposal vs debt consolidation in Canada
- Credit-card debt help in Canada: where to start
- Secured vs unsecured loans: compare the asset risk
- Balance transfer costs: look beyond the introductory rate
KNOW THE DIFFERENCE
Different options. Different conversations.
Start with how each works, who provides it and what to ask.
Consolidation loan
New borrowing used to pay existing balances.
- Who to speak with
- A lender or appropriately authorized broker
- A useful question
- What is the total repayment, including interest and fees?
Debt management plan
A voluntary repayment arrangement with participating creditors.
- Who to speak with
- A credit counselling organization
- A useful question
- Which creditors participate, and what fees apply?
Consumer proposal
A formal proposal to creditors under insolvency law.
- Who to speak with
- A Licensed Insolvency Trustee
- A useful question
- What are the costs, obligations and alternatives in my situation?
SEE THE TRADE-OFF
A smaller payment can cost more.
Imagine two offers to borrow the same $10,000. Here is what the payments alone add up to.
| Compare | 3-year offer | 5-year offer |
|---|---|---|
| Monthly payment | $340 | $260 |
| Number of payments | 36 | 60 |
| Total repaid | $12,240 | $15,600 |
$80 less each month. But $3,360 more repaid overall.
Try your own repayment numbersMAKE THE CONVERSATION COUNT
Three things to have handy
- 1The balances you want to combine
- 2Current interest rates and minimum payments
- 3A monthly payment you could sustain
How consolidation works
A new credit product pays off selected existing balances. Compare the debts covered, interest rate, fees and repayment term before committing. A line of credit may require a separate plan to reduce principal; making interest-only payments does not clear the balance.
Credit history and the cost of qualifying
Credit history affects the rate a lender may offer. A higher-rate consolidation product can increase your debt rather than solve it. Review your credit reports and budget first; do not assume one payment is cheaper. Continuing to spend on cleared accounts can leave you with both the new loan and new balances.
Compare the total repayment, not just the monthly payment
A lower payment can be useful, but ask how long you will be paying and what the full repayment adds up to. A longer term can make a new loan cost more overall. List the balances you want to combine before comparing a written offer.
Keep loan enquiries separate from repayment guidance
This page starts a consolidation-loan enquiry. A debt management plan through a counsellor is a different service, not another name for that loan. If you want repayment guidance instead, choose the debt-help path.
Does completing this form mean I qualify?
No. The form records what you want to explore. A lender would assess a separate application and explain its credit-check requirements and terms. The preview sends no application.
Check the source
Related options
Questions about your situation
- Consumer proposal vs debt consolidation in Canada
- Debt relief in Canada: compare your options
- Debt consolidation loans: pros and cons in Canada
- Unpaid credit card debt in Canada: what can happen?
- Debt relief in Ontario: local rules and next steps
- Debt relief in British Columbia: local rules and next steps
- Debt relief in Québec: local rules and next steps
- Credit-card debt help in Canada: where to start
- Consolidation loan declined? Other next steps in Canada
- Debt consolidation vs a debt management plan in Canada
- Debt relief options in Alberta: understand the different routes