When a debt consolidation loan makes sense in Canada
Consolidation saves money only when the new APR, including fees, is lower than the blended rate you pay now and the term isn't stretched far longer. Canadian credit cards commonly charge around 19.99%–22.99%; bank and credit-union consolidation loans for good credit are often well below that, while alternative lenders can charge 30%+ — where consolidation may not help at all.
- Avoid running the cards back up. The most common failure is a paid-off card refilled within a year.
- Secured options such as a HELOC are cheaper but put your home at risk. Try the HELOC calculator.
- Check affordability first with the debt-to-income calculator.
- Struggling to make minimums? A non-profit credit counsellor can discuss a debt management plan; the Financial Consumer Agency of Canada explains the options.
Read more: debt consolidation guide hub · consolidation lenders listed alphabetically · credit card payoff calculator.
Estimates only. Results assume fixed rates and payments and are not a loan offer or advice.