Borrowing topics

Debt consolidation means combining several debts — credit cards, lines of credit, payday loans — into a single payment, usually at a lower interest rate. Done right, it cuts your interest cost and simplifies your month. Done wrong, it just stretches the debt out longer.

A home equity line of credit lets you borrow against the value of your home, usually at a rate near prime. It's the cheapest revolving credit most Canadians can get — and the easiest to abuse, because the minimum payment is often interest-only and the balance can sit there for decades.

Most Canadians sign their lender's first renewal offer — and overpay for it. Renewal is the one moment you can switch lenders without a penalty, and the months before your date are when the real savings happen.

Lenders will happily approve you for more than you should borrow. The real affordability question isn't what a bank will give you — it's what payment fits your life after groceries, daycare, and the car.