Complete Guide to Debt Consolidation Loans in Canada 2026

Debt consolidation loans let you combine multiple high-interest debts into a single monthly payment with a lower interest rate. Canadian borrowers with $5K-$50K in debt can access rates from 4-29% depending on credit score, collateral, and lender type—potentially saving thousands in interest versus maintaining separate credit card balances at 19.99-24.99%. You need a credit score of 650+ for competitive rates, though some lenders work with scores as low as 600. With Canadian consumer debt reaching $2.5 trillion in Q4 2024 and 54% of Canadians struggling to pay bills, consolidation offers a structured path to becoming debt-free without the severe credit impact of bankruptcy or consumer proposals.

What Debt Consolidation Loans Actually Cost in 2026

Interest rates for debt consolidation loans range from 4% to 29% APR depending on whether you choose secured or unsecured financing and your credit profile. Banks typically offer 9-13% for unsecured personal loans to qualified borrowers, while credit unions provide 6-15% to their members. Home equity loans and HELOCs deliver the lowest rates at 4-9%, but you risk losing your home if you default.

The savings add up quickly. If you carry $10,000 across three credit cards at an average 19% APR and make minimum payments, you’ll pay $6,201.80 in total interest over roughly seven years. Consolidate that same debt into a personal loan at 10% over 36 months, and your total interest drops to $1,616.19—a savings of $4,585. Your monthly payment becomes predictable at $322 instead of fluctuating minimum payments that keep you in debt longer.

Here’s what happens with different rate scenarios on $10,000 consolidated debt:

• 5% APR over 24 months: $438/month payment, $529 total interest
• 10% APR over 36 months: $322/month payment, $1,616 total interest
• 15% APR over 48 months: $278/month payment, $3,346 total interest
• 20% APR over 60 months: $265/month payment, $5,900 total interest

The catch is origination fees. Most lenders charge 0-5% of your loan amount upfront, which means a $25,000 consolidation loan could cost you $1,250 before you even start paying down debt. Banks and credit unions typically charge lower fees (0-2%) compared to online lenders (3-5%). Some lenders also impose prepayment penalties of 1-3% of your remaining balance if you pay off your loan early, so read the fine print.

The average credit card interest rate in Canada sits at 19.99-24.99%, which means anyone consolidating high-interest debt into a loan below 15% sees immediate savings. Credit card balances in Canada hit $124 billion in Q4 2024, with 64% of cardholders carrying revolving balances month-to-month. You’re not just paying for past purchases—you’re funding interest charges that compound daily.

Ready to see your potential savings? Compare pre-approved consolidation rates in 60 seconds without affecting your credit score.

Eligibility Requirements and Approval Criteria

You need a minimum credit score of 650 to qualify for competitive consolidation loan rates between 6-15%. The average Canadian credit score sits at 760, which gives most borrowers access to favorable terms. If your score falls between 600-649, you’ll still find lenders willing to work with you, but expect rates closer to 18-29%. Below 600, traditional consolidation becomes difficult—only 10-30% of applicants in this range get approved.

Lenders evaluate your debt-to-income ratio ruthlessly. Your total monthly debt payments (including the new consolidation loan) must stay below 36% of your gross monthly income to qualify at most banks and credit unions. Some alternative lenders stretch this to 43%, but higher ratios trigger higher rates. A borrower earning $65,000 annually ($5,416/month gross) needs to keep total debt payments under $1,950/month to meet the 36% threshold.

The documentation required is straightforward but non-negotiable:

• Government-issued photo ID (driver’s license or passport)
• Proof of income (two recent pay stubs or two years of tax returns for self-employed)
• Employment verification (contact information for your employer or business registration)
• Credit report authorization (lenders pull this themselves but need your consent)
• List of debts to consolidate (account numbers, balances, and current interest rates)

Stable employment matters more than high income. Lenders want to see you’ve held your current job for at least six months, though a year or more significantly improves approval odds. Contract workers and gig economy workers face extra scrutiny—you’ll need to prove consistent income over 12-24 months through bank statements and tax returns.

If your credit score falls below 650, a co-signer with stronger credit can unlock better rates and higher approval chances. The co-signer becomes equally responsible for the debt, which means their credit takes a hit if you miss payments. Some lenders let you remove the co-signer after 12-24 months of on-time payments and a credit score improvement.

Secured loans require collateral, typically your home with at least 20% equity available. If you own a home worth $400,000 with a $240,000 mortgage, you have $160,000 in equity. Lenders typically let you borrow up to 80% of your home’s value minus your existing mortgage, which means you could access up to $80,000 for debt consolidation ($400,000 × 0.80 = $320,000 − $240,000 = $80,000 available).

Take Chen from Mississauga—38 years old with $31,000 in mixed debt across credit cards and a car loan at 14%. His credit score was 668, and his debt-to-income ratio was 39%. He got rejected by two banks for unsecured loans but qualified for a credit union loan at 11.5% after providing proof of three years’ employment at the same company. His monthly payment dropped from $985 to $695 over 48 months, freeing up $290/month and saving $7,800 in total interest.

Types of Debt Consolidation Loans Available

Six main consolidation options exist in Canada, each with distinct cost structures and eligibility barriers. Your credit score, home ownership status, and debt amount determine which options make financial sense.

Unsecured personal loans require no collateral, which makes them accessible to renters and anyone without home equity. Banks and online lenders offer $2,000-$50,000 at rates between 8-29% depending on your credit score. RBC and CIBC typically quote 9-10% for borrowers with 680+ scores, while alternative lenders like Fairstone and easyfinancial charge 18-29% for riskier profiles. You repay over 1-5 years with fixed monthly payments. The downside is stricter approval criteria—you need 650+ credit and strong income verification.

Secured home equity loans and HELOCs deliver the lowest rates at 4-9% because your home serves as collateral. You can borrow larger amounts (often $50,000-$200,000) based on available equity. Home equity loans provide a lump sum with fixed payments, while HELOCs work like a credit line you can draw from repeatedly. The risk is real—default on payments and you lose your home through foreclosure. You also pay legal fees ($500-$1,500) and appraisal costs ($300-$500) upfront.

Credit union loans offer rates 2-5% lower than traditional banks, typically 6-15% for members in good standing. You must join the credit union first, which usually requires living or working in their service area and opening a savings account with $5-$25. Credit unions like Meridian and Coast Capital provide more flexible approval criteria than banks and often work with borrowers whose credit scores dip to 600-620. Loan amounts range from $5,000-$30,000 for most members.

Bank personal loans from the Big Five (RBC, TD, Scotiabank, CIBC, BMO) range from $3,000-$200,000 at 9-13% for qualified borrowers. If you already bank with them and have a good track record, you might receive a 0.5-1% rate discount. Banks prefer borrowers with 660+ credit scores and stable employment. The advantage is established relationships—your banker already knows your financial history, which can speed approval.

Balance transfer credit cards offer promotional rates of 0-5% for 6-18 months, then revert to standard rates around 19.99%. This works for smaller debts under $5,000 that you can pay off during the promotional period. You typically pay a 1-3% transfer fee upfront. The risk is failing to pay off the balance before the promotional rate expires—you’re right back where you started.

Lines of credit provide flexible access to funds up to $30,000 at variable rates tied to the prime rate plus 2-8%. You only pay interest on what you borrow, and you can pay down and re-borrow as needed. This flexibility helps with ongoing debt management but requires discipline—many borrowers never pay down the principal because minimum payments stay low.

Some borrowers don’t qualify for any loan option. If your debt-to-income exceeds 50%, your credit score sits below 600, or you’re already behind on payments, a consumer proposal might save more money. Consumer proposals let you settle debt for 50-80% of what you owe through a Licensed Insolvency Trustee, with repayment terms up to 60 months. The proposal stays on your credit report for 2-6 years after completion, but you avoid bankruptcy’s harsher consequences.

How to Apply and Get Approved

The application process moves fast once you gather your documents. Online pre-approval takes 1-5 minutes—you enter basic information about income, employment, and debt, then receive an estimated rate and loan amount. This is a soft credit check that doesn’t affect your score. Full approval requires 1-3 business days for document verification and underwriting. Funding arrives within 24 hours to 5 business days after final approval, with most lenders hitting your account in 2-3 days.

Here’s what actually happens step-by-step. You submit your application online or in-branch with your income documentation, ID, and list of debts. The lender pulls your full credit report (hard inquiry, -5 to -10 points temporarily) and verifies your employment by calling your employer or checking pay stub details. Their underwriting team reviews your debt-to-income ratio and payment history. If approved, you review and sign the loan agreement electronically or in person. The lender either sends funds directly to your creditors or deposits money in your account for you to pay off debts yourself.

Direct creditor payment matters more than most borrowers realize. Some lenders offer to pay your existing creditors directly from the loan proceeds, which eliminates the temptation to spend the money elsewhere. This also creates a clean paper trail showing your old debts are settled. Not all lenders provide this service—ask specifically during the application process.

The hard credit inquiry from your application drops your score 5-10 points temporarily. The good news is that multiple inquiries within 14-45 days (depending on the credit scoring model) count as a single inquiry for rate shopping purposes. This means you can apply to three lenders in two weeks and only take one scoring hit. Your score recovers within 3-6 months as long as you make payments on time.

Approval rates vary significantly by credit tier. Borrowers with 650+ scores see 70-80% approval rates at traditional lenders. The 600-649 range drops to 40-60% approval, usually with higher rates. Below 600, only 10-30% of applicants get approved, and those who do face rates above 20%. The insolvency rate hit 4.2 per 1,000 adult Canadians in 2024—the highest since 2019—which makes lenders more cautious about who they approve.

Take Aisha from Calgary—42 years old with $27,500 in credit card debt and a 692 credit score. She applied to three lenders over one weekend: her bank (TD), a credit union (Servus), and an online lender (Borrowell). TD offered 11.9% over 48 months, Servus came back at 9.8% over 60 months, and Borrowell quoted 14.5% over 36 months. She chose Servus for the lower rate despite the longer term, knowing she could make extra payments without penalty. The entire process from first application to funded loan took nine days.

Getting rejected happens. The most common reasons are debt-to-income above 43%, too many recent credit inquiries (six or more in six months), unstable employment (job hopping or recent unemployment), or existing delinquencies (accounts 90+ days past due). If you get rejected, wait 30-60 days before applying again, use that time to pay down some debt or resolve collections, and consider adding a co-signer for your next attempt.

Ready to get started? See your pre-qualified rate in 60 seconds with no impact to your credit score.

Impact on Your Credit Score and Financial Record

Your credit score drops 10-20 points initially when you consolidate debt. The hard inquiry from the loan application costs 5-10 points, and opening a new credit account triggers another 10-20 point dip. This is temporary. The real credit score benefit comes from what happens next—if you use the loan to pay off credit cards, your credit utilization ratio plummets from 80%+ to under 10%, which typically adds 20-50 points within 3-6 months.

Credit utilization accounts for 30% of your credit score calculation. If you carry $9,000 in balances across credit cards with $10,000 in total limits, you’re at 90% utilization—a major red flag to lenders. Pay off those cards with a consolidation loan, and your credit card utilization drops to 0% while the loan itself appears as an installment account (which doesn’t use the same utilization calculation). Your score climbs as long as you avoid running up the credit cards again.

The timeline for credit recovery looks like this: Month 1-3, you see the initial score drop from the inquiry and new account. Months 3-6, your score rebounds as on-time loan payments appear and credit card utilization stays low. Months 6-12, your score typically exceeds your pre-consolidation score if you maintain perfect payment history. By month 24, the hard inquiry falls off your report completely, and your score reflects the full positive impact of reduced utilization and payment history.

Adding an installment loan to a credit profile that only contains credit cards improves your credit mix, which accounts for 10% of your score. Lenders like to see you can manage both revolving credit (cards) and installment credit (loans) responsibly. This is a minor factor but helps borrowers whose entire credit history consists of one or two credit cards.

The consolidation loan stays on your credit report for six years after you close it. As long as you make payments as agreed, it appears as a positive tradeline showing responsible borrowing. Late payments tank this benefit—a single 30-day late payment can drop your score 50-100 points and stays on your report for six years. Two consecutive missed payments trigger collection activity and destroy any credit score gains you achieved through consolidation.

Compare this to alternatives. A consumer proposal stays on your Equifax credit report for three years after completion (six years total maximum from the filing date), and your TransUnion report shows it for two years post-completion. Bankruptcy appears for six years after discharge in most provinces (seven years in some). Both are noted as “special arrangements” or “settled for less than owed,” which makes future borrowing difficult. Consolidation loans don’t carry these stigmas—they show as regular installment debt.

The credit participation landscape in Canada includes 32.3 million people holding at least one credit product, with 2.5% year-over-year growth. Your consolidation loan becomes part of this positive credit activity as long as you handle it responsibly. The average Canadian maintains a credit score of 760, which means most people successfully manage their credit obligations despite carrying debt.

Keep your paid-off credit cards open but unused. Closing them reduces your total available credit and spikes your utilization ratio if you ever carry a balance again. The age of your credit accounts matters—older accounts boost your score. Just don’t touch those cards. Lock them in a drawer.

Common Mistakes That Cost Thousands

Running up credit card balances after consolidation destroys the entire purpose of the loan. Research shows 70% of people who consolidate debt re-accumulate new balances within 24 months because they kept credit cards open and accessible. You consolidated $15,000 in credit card debt into a loan, but within 18 months you’ve charged another $8,000 on those cards—now you’re paying both the consolidation loan and new credit card interest. Close the cards or freeze them physically.

Choosing too long a repayment term costs you thousands in extra interest even at lower rates. A $10,000 consolidation loan at 15% APR over 60 months generates $4,273.96 in total interest with monthly payments of $237. The same loan over 24 months at a slightly lower 12% rate costs only $1,271.23 in interest with $471 monthly payments. Yes, the monthly payment is double, but you save $3,000 and get out of debt three years faster. Most borrowers automatically select the lowest monthly payment without calculating total cost.

Ignoring origination fees when comparing loans leads to expensive surprises. A lender advertising 8% APR with a 5% origination fee costs more than a lender charging 9% with zero fees on a $25,000 loan. The 8% loan charges $1,250 upfront ($25,000 × 0.05), which means you only receive $23,750 but owe payments on the full $25,000. Calculate APR plus fees to see the true cost of borrowing.

Not shopping around for rates leaves money on the table. A 3% rate difference on $30,000 over 48 months costs you roughly $2,000 extra. One borrower received quotes of 12.5% from their bank, 8.9% from a credit union, and 15.5% from an online lender—all within the same week with the same credit score. The rate spread exists because lenders evaluate risk differently and have different funding costs. Apply to at least three lenders before choosing.

Prepayment penalties trap borrowers who want to pay off debt faster. Some lenders charge 1-3% of your remaining balance if you pay the loan off early, or require three to six months of interest as a penalty. On a $20,000 loan with an 18-month remaining balance, a 3% penalty costs you $600 to eliminate debt ahead of schedule. Look for loans with no prepayment penalties, or at least understand the terms before signing.

Taking an unsecured loan when you qualify for secured financing wastes money on interest. If you own a home with available equity but choose a 12% unsecured personal loan over a 5% home equity loan, you pay $4,800 extra in interest on a $30,000 loan over 60 months. The psychological comfort of not using your home as collateral costs real money. The key is honest assessment—if you have stable income and low default risk, the secured loan makes financial sense.

Credit card balances in Canada hit $124 billion in Q4 2024, with 64% of cardholders carrying revolving balances month-to-month. Most of that debt sits at 19.99-24.99% APR, slowly compounding while minimum payments barely touch the principal. The mistake is waiting too long to consolidate—every month you delay costs $166 in interest on $10,000 at 20% APR, money that could go toward principal reduction.

Take Marcus from Kitchener—29 years old who consolidated $22,000 in credit card debt into a 48-month loan at 10.5%, saving $8,400 in projected interest. Six months later he financed a $4,800 vacation on credit cards at 21.99% because “the monthly payment wasn’t that high.” Twelve months after consolidation, he carried $6,300 in new credit card debt while still paying the consolidation loan. His total monthly debt payments jumped from $625 to $880, putting his debt-to-income back above 40%. He needed a second consolidation two years later, this time with a co-signer because his credit score had dropped to 615.

When Consolidation Isn’t the Right Solution

Debt consolidation fails when your debt-to-income ratio exceeds 50% because your underlying problem is income, not interest rates. If you earn $4,500/month gross and owe $42,000 across various debts, your required monthly payment for a 48-month consolidation loan at 12% would be around $1,105—nearly 25% of your gross income and likely 35-40% of your net income. This isn’t sustainable. You need debt reduction, not debt restructuring.

Total unsecured debt above $50,000 becomes difficult to consolidate through traditional loans. Most banks and credit unions cap unsecured personal loans at $50,000, and many stop at $30,000-$35,000. If you owe $68,000 across credit cards, personal loans, and lines of credit, you won’t find a single consolidation loan to cover everything unless you use home equity. This is where consumer proposals become practical—they let you consolidate $5,000-$250,000 in unsecured debt and typically reduce the total amount owed by 50-80%.

Credit scores below 580 lock you out of reasonable consolidation options. The few lenders willing to work with scores in the 500s charge 25-29% APR, which isn’t much better than credit card rates. You’re replacing 21% credit card debt with 26% loan debt while paying origination fees. This is expensive shuffling, not progress. A consumer proposal requires no minimum credit score and freezes interest immediately.

If you can’t afford the consolidated monthly payment, consolidation accelerates your financial collapse. Running the numbers matters. A borrower owing $35,000 who consolidates into a 60-month loan at 14% faces $814/month payments. If their net income is $3,200/month after taxes, that payment consumes 25% of their budget before rent, food, or other bills. They’ll default within six months and damage their credit worse than if they’d chosen an alternative solution from the start.

Consumer proposals offer a legal alternative under the Bankruptcy and Insolvency Act for $5,000-$250,000 in unsecured debt. You work with a Licensed Insolvency Trustee to propose paying creditors a percentage of what you owe (typically 25-50%) over a maximum 60-month period. Creditors vote on whether to accept. If approved, your interest stops immediately, collection calls cease, and you make one monthly payment to the trustee who distributes funds to creditors. The proposal stays on your credit report for two to six years after completion depending on the bureau, which is less severe than bankruptcy.

Bankruptcy becomes necessary when your debt exceeds $250,000, you have no assets to protect, and your income barely covers survival expenses. You’re discharged from most debts in nine months for a first-time bankruptcy, though student loans less than seven years old survive. Bankruptcy appears on your credit report for six to seven years after discharge depending on your province. The insolvency rate hit 4.2 per 1,000 adult Canadians in 2024—the highest since 2019—showing more people exhausted their ability to manage debt through conventional means.

Debt management plans through non-profit credit counseling agencies work when you need interest rate relief but can afford to pay 100% of your debt. The agency negotiates with creditors to reduce or eliminate interest (typically achieving 0-10% rates) while you make one monthly payment. You’re not borrowing money—you’re following a repayment schedule with creditor cooperation. This suits borrowers whose income supports full repayment over 3-5 years but can’t handle current interest charges.

Take Ranjit from Brampton—51 years old with $67,000 in unsecured debt and a 595 credit score after missing several payments during a six-month unemployment period. His debt-to-income ratio was 58% once he found new work. He tried to consolidate but got rejected by four lenders. A Licensed Insolvency Trustee calculated he could afford $625/month toward debt. They filed a consumer proposal offering creditors $31,000 over 60 months (46% of total debt). Creditors accepted, his collections stopped within 14 days, and he became debt-free in five years. His credit report shows the proposal completed for two years post-filing, but he rebuilt his score to 680 within three years by managing new credit responsibly.

If creditors are already suing you or garnishing wages, consolidation won’t help—you’re past the point where voluntary repayment works. Wage garnishment in most provinces takes 20-50% of your net income, leaving you unable to afford both survival expenses and loan payments. Filing a consumer proposal or bankruptcy triggers an automatic stay of proceedings that stops lawsuits and garnishments immediately.

Unsure if consolidation is right for your situation? Speak with a Licensed Insolvency Trustee for a free consultation to explore all your options.

How to Choose the Right Lender and Loan Type

Start by calculating your maximum affordable monthly payment—this determines your loan term and which lenders you can work with. Take your monthly net income, subtract essential expenses (rent, food, utilities, transportation, minimum payments on debts not being consolidated), and identify what’s realistically available for debt repayment. If you net $4,200/month and essential expenses consume $2,800, you have $1,400 available. Allocate no more than 80% of that buffer ($1,120) to your consolidation payment to maintain breathing room for unexpected expenses.

Compare total cost of borrowing, not just monthly payment or interest rate. A loan at 9% APR with a 3% origination fee and monthly account fees costs more than a 10% loan with zero fees. Calculate the total dollars you’ll pay over the life of each loan including all fees. Use each lender’s amortization schedule to see exactly how much interest you pay. The math matters more than marketing.

Your credit score and home ownership status determine which loan type saves the most money:

Credit score 680+, own home with equity: Home equity loan or HELOC at 4-9% beats unsecured options. You save $6,000-$10,000 in interest on $30,000 over 60 months compared to unsecured loans. Worth the collateral risk if your income is stable.

Credit score 650-679, renting or no home equity: Credit union personal loan at 8-12% delivers better rates than banks (9-13%) or online lenders (12-18%). Membership is easy to establish.

Credit score 600-649, stable employment: Alternative online lenders or credit unions with co-signer options. Expect 15-22% rates. Focus on shortest term you can afford to minimize interest.

Credit score below 600 or debt-to-income above 45%: Skip consolidation loans entirely. Consumer proposal or debt management plan reduces total debt burden more effectively.

Secured versus unsecured breaks down to risk tolerance and available collateral. Secured home equity loans offer rates 3-9% lower than unsecured personal loans on the same amount. The risk is losing your home if you default. If you have stable government or corporate employment with low layoff risk, and the monthly payment stays under 20% of your net income, secured loans make mathematical sense. If your income is variable (commission sales, contract work, seasonal) or your payment would exceed 25% of net income, unsecured protects your home even though it costs more.

Direct creditor payment from the lender matters for borrowers who lack financial discipline. Some lenders deposit consolidation funds directly into your bank account, trusting you’ll pay off existing debts. Others send payments straight to your creditors, closing those accounts for you. The second option eliminates temptation and ensures funds get used correctly. Ask specifically whether the lender offers direct creditor payment during the application process.

Rate shopping concentrates all your applications within a 14-day window. Credit scoring models count multiple inquiries for the same purpose (auto loan, mortgage, personal loan) as a single hard pull if they occur within 14-45 days depending on the model. Apply to your top three lenders over one weekend, compare the written offers, and choose within two weeks. You take one scoring hit instead of three.

Credit union membership delivers value beyond interest rates. Credit unions like Meridian, Vancity, and Alterna Bank typically offer 2-5% lower rates than traditional banks because they’re non-profit cooperatives. Membership requirements vary—you might need to live in their service area, work for certain employers, or belong to specific organizations. Most let you join by opening a savings account with $5-$25. The relationship-based approach means credit unions work harder to approve borderline applications that banks would reject.

Banks reward existing customers with rate discounts of 0.5-1% and faster approval processes. If you’ve banked with TD or RBC for five years with no overdrafts or late payments, they already trust you. Mention your existing relationship when applying. Some banks offer pre-approved consolidation loans to good customers, which eliminates the credit inquiry and speeds funding to 24-48 hours.

Alternative online lenders like Fairstone, Loans Canada, and easyfinancial approve borrowers who can’t qualify at banks, but charge 18-29% rates. These work as last-resort options when credit unions reject you and consumer proposals seem too drastic. The speed is appealing—some approve and fund within 24 hours—but the total cost over 60 months can be devastating. Use them only if your alternative is payday loans or letting accounts go to collections.

Take Simone from Halifax—34 years old with $19,000 debt, 705 credit score, renting, earning $58,000/year. She applied to three lenders: her bank (Scotiabank) quoted 11.5% over 48 months with $50 annual fee, a credit union (Credit Union Atlantic) offered 8.9% over 48 months with no fees after she joined with a $10 deposit, and an online lender (Fairstone) came back at 14.9% over 60 months with a 2% origination fee. She chose the credit union despite never having heard of them before. The rate difference saved her $1,847 in total interest compared to her bank’s offer, and $4,120 compared to the online lender despite the longer term they offered.

Prepayment flexibility matters if you expect income increases or bonuses. Look for loans that allow extra payments or full early payoff without penalties. This lets you eliminate debt faster when tax refunds, work bonuses, or side income arrive. Some lenders allow 15-20% annual prepayment without penalty, while others charge 1-3% of the remaining balance to pay off early.

Ready to compare your options? Get personalized rate quotes from top lenders in your credit tier—rates from 5.99% APR for qualified homeowners.

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Debt consolidation works when you have stable income, manageable debt levels, and the discipline to avoid re-accumulating balances on paid-off credit cards. The math is simple—replacing 20%+ credit card debt with single-digit or low-teen loan rates saves thousands in interest and creates a clear path to becoming debt-free. The execution requires choosing the right loan type for your credit profile, comparing at least three lenders, and committing to the full repayment term without adding new debt.

Your next step is gathering your documents and checking rates. You need two recent pay stubs or tax returns, a list of your current debts with balances and interest rates, and your government ID. Check your credit score free through Borrowell or Credit Karma Canada before applying so you know where you stand. Then apply to three lenders within a 14-day window to compare offers with minimal credit score impact.

The reality is that 54% of Canadians struggle to pay their bills and consumer debt hit $2.5 trillion in Q4 2024. You’re not alone in needing help managing debt. The difference between people who successfully consolidate and those who fail comes down to changing the behavior that created the debt in the first place. Consolidation gives you a lower rate and structured repayment—you provide the discipline to not recreate the problem.

Compare pre-approved consolidation rates now to see how much you can save. The application takes 5 minutes, won’t affect your credit until you accept an offer, and shows you exactly what you qualify for based on your current financial situation. Every month you wait costs you money in unnecessary interest charges.