Debt Relief Solution
Debt Consolidation: One Payment, Fewer Headaches
A new loan/product to pay off existing debts and simplify into one payment.
Compare your consolidation options
We’ll show if a proposal or DMP could save more.
What It Is
What it is
- A new loan or product (e.g., bank loan, line of credit, balance transfer) used to pay off multiple debts.
- You then make one monthly payment to the new lender.
Advantages and Considerations
Advantages
- Simplifies payments; may lower interest if you qualify.
- No court filing; can help credit long‑term with on‑time payments.
Considerations
- No legal stay; collections/interest continue if you default.
- Approval depends on credit/income/collateral; promo rates can jump.
- Multiple applications can ding your score.
Eligibility Requirements
- Lender underwriting (credit score/history, DTI, income stability, collateral for secured options).
Costs & Fees
- Interest + lender fees; balance transfer fees and promo periods that later reset.
Credit Impact
- Hard inquiries and a new account can temporarily lower scores; consistent on‑time payments help recovery.
Included and Excluded Debts
Understanding which debts qualify for this solution
Included Debts
- Best for high‑interest credit cards/LOCs you can replace with a lower rate.
Excluded Debts
- Not ideal if you’re already behind or can’t afford minimums—consider a proposal or DMP.
See Which Option Fits Your Budget
Enter your total unsecured debt to compare consolidation vs. proposal/DMP.
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We’ll estimate ranges based on typical rates/terms—no credit check.Step-by-Step Process
- Pull your credit report and map your budget.
- Shop rates with your bank/credit union first.
- Apply strategically (avoid shotgun applications).
- Use funds to pay off old balances and curb new spending.
Preparation Checklist
- Income proof & employment letter
- Last 3 months bank statements
- Statements for all debts
- ID; mortgage/HELOC details (if using equity)
Timeline and Duration
- Days 1–7: Shop & apply
- Days 7–14: Approval & disbursement
- Month 1+: Begin one payment; monitor progress
Alternative Solutions
- Consumer proposal: legal interest freeze + reduced principal.
- DMP: interest relief via counsellor; repay in full over time.
Will this hurt my credit? A small dip from inquiries/new account is common; utilization improvements can help later.
Important Warning
Avoid high‑fee lenders and watch for rate resets after promotional periods.
Common Myths and Misconceptions
- Myth: Consolidation always saves money — Reality: Extending the term can increase total interest.
Provincial Variations
Debt relief rules differ by province. Expand any province to see key details and service-specific notes.
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland and Labrador
Nova Scotia
Ontario
Prince Edward Island
Québec
Saskatchewan
References
- FCAC on consolidation: https://www.canada.ca/en/financial-consumer-agency/services/debt/debt-consolidation.html