Debt Consolidation Canada Families & Individuals Can Trust
Find the Right Debt Consolidation Option for You
Debt is a numbers game, and bringing the numbers down is your goal. Debt consolidation combines multiple debts or payments so that you only have one payment to make.
Having fewer payments each month can be a huge relief. On top of that, you can save lots of money if your debt is consolidated at a lower interest rate. However, the thought of borrowing more money to pay off your debt can be scary.
For those who live in Canada, debt consolidation includes many options and services. Read on below and find the right solution that will work best for you.
Want to get debt-free sooner? Call the Credit Counselling Society today to find out about debt management solutions.
Common Reasons to Consolidate Your Debt
There are a lot of reasons people want consolidate their debt:
- You can no longer pay all your debts monthly.
- Payments on high interest credit card debts are eating into your budget.
- You’ve been paying debts using a line of credit or bank overdraft.
- You’re unable to refinance your mortgage to consolidate debt like you have in the past.
- You have so many debts that it’s hard to keep track of them all, which can lead to missed or partial payments.
Make Repayment Simple
Debt consolidation can help simplify your finances when you have multiple debts from different creditors with varying interest rates, repayment schedules, and other conditions. With so many differences between each, keeping track of them all can feel overwhelming.
When you merge your debts or payments through debt consolidation, you’ll only have to keep track of one monthly payment. If some or all of the debts you’re carrying have high interest rates, then consolidating them with a lower interest rate will also save you money.
Since there are many different types of consolidation, debt relief is always possible. Below, we break down each type of debt consolidation you can use and its pros and cons.
More
Many different debt consolidation options are available in Canada. We help people discover their options in Alberta, British Columbia, Manitoba, Ontario, Saskatchewan, Yukon, Northwest Territories, and Nunavut. Keep reading below to see an overview of common options, but you can also see which options may specifically apply to your situation by answering some quick questions.
Debt Consolidation Loan
A debt consolidation loan is when you borrow money to pay off other debt. The money from the new loan pays off the other debts, and then you only make a monthly payment on this one new loan.
As a benefit of debt consolidation, personal loans like these can have lower interest rates than your other debts. Debt consolidation can also merge different types of debt, such as personal loans, late bills, credit card debt, and more.
It may be difficult to apply for a consolidation loan with your bank or credit union, or a debt consolidation company, especially if you’re behind on your payments. The biggest mistake with debt consolidation is that you can accumulate more debt if you don’t carefully live with a budget while paying off the consolidation loan.
To be safe and sure, speak with a credit counsellor when you’re considering debt consolidation loans. The counsellor can help you create a budget and a plan to ensure your debt is paid off within a reasonable time and not re-accumulated.
Pros:
- One monthly payment
- A potentially better interest rate
Cons:
- Need to qualify
- It can make your debt load worse
- Requires a satisfactory credit score
- Also often requires collateral for the loan
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Credit Card Balance Transfer
Credit cards often offer attractive promotions, but these come with strict terms and conditions, especially when debt is being consolidated. Credit card debts can be paid off with a new credit card (consolidating credit card debt onto one credit card), but this often doesn’t work out as planned.
Even if the new card has a low interest rate for debt consolidation, that low rate often won’t apply to any new purchases you make. Also, if you haven’t paid off the balance transfer amount by the time the promotional rate expires, you could be saddled with hefty payments.
However, one advantage of a balance transfer is flexibility; credit card debt consolidation can be tackled aggressively, relieving you of debt sooner, but in an emergency, you can also temporarily fall back to making minimum payments.
Pros:
- Payment flexibility
- Low interest rate to start
Cons:
- Need to qualify for new credit cards
- It could keep you in debt longer
- Promotional interest rates expire quickly
- Typically switches to a very high interest rate
Find Out What Options May Be Available to You
by Answering 9 Simple Questions
Just answer these easy, multiple-choice questions to get a look at your potential options. Within a few minutes, you'll be looking at summarized options and results that apply specifically to your situation.
Discover Your Options
A Visual Overview of Possible Options
Here are some options that may be available to you based on the information you have provided about your financial situation. The most likely options are in green, less likely in yellow, and least likely in red. This is only intended to provide you with a general idea of the options that may be available to you. A credit counsellor will need to go over your information in much more detail to make a more precise determination.0
Option
Do a Deeper Dive to Uncover More Options
It looks as though your situation requires more in-depth analysis from a trained credit counsellor. They can help you optimize your budget, explore options, and create a plan to get back on track.
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Option
Self-Managed Solution
After thoroughly exploring your options with a credit counsellor, they can help you put together a plan to get out of debt in a reasonable amount of time. You can then implement this plan on your own.
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Option
Debt Consolidation Loan
Based on the information you've provided, it appears as though this could be a possibility if your credit score is strong enough.
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Option
Debt Management Program
It appears as though this may be an option for you. A Debt Management Program eliminates or drastically reduces interest and consolidates all payments into one.
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Option
Consumer Proposal
This may be an option for you to consider. It's a legal process that consolidates all payments into one. Talk to a credit counsellor about this and see if it makes sense for your situation.
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Option
Bankruptcy
Based on the information you've entered, it appears as though bankruptcy may be an option to resolve your financial challenges. You should speak with a credit counsellor about this and make sure you've exhausted all other options first.
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Option
Orderly Payment of Debts
Based on what you've entered, it looks as though an Orderly Payment of Debts (OPD) program may be an option for you. To find out if this would make sense for your situation, you should speak with a credit counsellor.
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Option
Voluntary Deposit
Based on the information you've provided, it looks as though a voluntary deposit program may be an option to address your debt situation.
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Bonus Option
Online Workshops
Learn how to improve your financial situation, create a budget, make your dollars stretch further, and get out of debt with one of our many helpful online workshops we call webinars.
More Specifics on How We Can Help You
Get Help Today
Give us a call to speak with one of our credit counsellors at 1-888-527-8999, or if you'd like us to contact you instead, please fill out the form below.
Use Your Home Equity to Consolidate Debts
Home equity is what’s left when you subtract what you owe on your house from what it’s worth. Depending on how much equity you have in your home, you might be able to borrow against it and use the money you get to pay off debt. However, Canada has mortgage rules about using your home equity to consolidate debts.
Before increasing your mortgage to pay off your debts, take out a second mortgage at a higher interest rate, or apply for a home equity loan, talk to an experienced credit counsellor for more options.
Pros:
- Low interest rate if done through a bank or credit union
- Flexible payment arrangements
Cons:
- Super high fees & interest if done through a subprime lender
- You must have enough equity in your home
Debt Settlement in Canada
When your finances have been severely impacted and it doesn’t look like the next 5-10 years will be better, but you do have a lump sum of money available, then offering your creditors a settlement might be a solution.
A debt settlement is a one-time lump sum payment that only partially pays back your debt. In return, your creditors write off the rest. While this is great to get you out of debt sooner, it can be hard to negotiate with creditors to agree to your offer. You’ll also need the money ready right away.
Pros:
- Repay less than you owe
- Saves money for necessities if you can’t pay your debts
- Instant debt relief once creditors agree
Cons:
- The lump sum must be readily available before making an offer
- Negotiations are needed with creditors
- Strongly affects credit history and rating
File a Consumer Proposal
Most people know about bankruptcy, but not as many know about a consumer proposal.
It’s a legal agreement between you and your creditors, arranged and administered by a bankruptcy trustee (now called a Licensed Insolvency Trustee), to repay your debt with monthly payments that can stretch to almost 5 years.
Instead of consolidating your debts into one loan, it combines your debt payments into just one. Your debts will still be with your creditors, but the amount you pay your trustee each month is disbursed to your creditors after the trustee’s fee is deducted.
Like bankruptcy, filing a consumer proposal can affect your credit score and even impact future career opportunities. Another similarity is that the amount of debt you have to repay is often reduced, which can result in lower monthly payments.
Pros:
- No interest
- Often, you repay less than you owe
- Pauses active debt collection on student loans
Cons:
- Not private – consumer proposals are a permanent public record
- Typically, it does a lot of damage to your credit rating for about 8 years
- Missing more than 3 payments ends your proposal and you can’t file another one
Debt Management Program (DMP)
A Private Way to Get Debt Relief & Get Out of Debt Without a Public Record
The journey to becoming debt-free can be challenging, so why walk it alone? The Credit Counselling Society provides a Debt Management Program (DMP) that gives you the benefits of payment consolidation and the guidance of an expert credit counsellor.
A DMP doesn’t consolidate or merge debts but rather combines your debt payments into one. We arrange a payment amount with your creditors for one monthly payment that fits your budget.
You then make your payment to us and we disburse it to your creditors, who will significantly reduce or waive interest charges going forward.
Your credit counsellor will help you stay on track to becoming debt-free and rebuild your credit rating.
Pros:
- Greatly reduced or 0% interest
- Debt free within 5 years
- DMPs are private and kept out of public records
- Credit counselling support
Cons:
- Can impact your credit score
- Has a nominal fee
- Not all debts can be included
Last Updated on April 15, 2025
Not sure which option is right for you?
Get answers from our certified counsellors.
With so many debt consolidation options, finding the right one by yourself can be overwhelming. Our friendly, professional credit counsellors can guide you through this process by carefully reviewing your financial situation and answering any questions you have. Consolidated debt counselling from the Credit Counselling Society is always free, confidential, and without obligation. Reach out today.
More Information on Debt Consolidation
Although there are many options for debt consolidation, Canadian residents have one they can truly rely on. To help you out, we provide this article on how best to consolidate debt faster and easier.
Additionally, you can join one of our friendly, interactive financial online workshops or webinars, where you’ll learn how to create a personal budget that works, manage money better, improve your credit, and get out of debt.
You can also book a free session with one of our debt management experts at the Credit Counselling Society. We’ll ensure you get the best debt consolidation advice and guidance Canada has to offer. Contact us to get started.
Last Updated on April 15, 2025
CCS negotiated on my behalf to bring down my interest rates to zero
Excellent way to consolidate, to make payments towards the principle only! CCS negotiated on my behalf to bring down my interest rates to ZERO with all my creditors while I paid off the debt load, that would have taken me 150 years to pay off, accomplished in 4.5 years. Now I am debt free!
Lori
Find out how to get debt relief
Get the help you need. Find the right debt management solutions for your specific needs and circumstances. Instead of endlessly looking for providers online, book a free appointment with the Credit Counselling Society and let one of our experienced counsellors help you.
If we can’t provide suitable debt management solutions or debt consolidation services, we’ll refer you to a trusted organization that can. Feel free to call or chat with us online.
Get the clarity you need.
Objective debt consolidation advice.
When you’re going through financial difficulty there are a lot of options to consider. So it can be super helpful to sit down with an knowledgeable, non-profit credit counsellor who can objectively review all your debt consolidation options with you, give you the right advice and guidance, and help you make a plan to resolve your difficulties. Once you can see your way out, you can regain your peace of mind and follow your plan forward with confidence.
Related Topics
Declined for a Loan?
Here are 5 reasons why people are declined for a consolidation loan, and what to do instead.
Mistakes to Avoid
Here are 4 common debt consolidation mistakes, how to avoid them, and where to get help.
Debt Management Program
You’re not alone if you’re wondering if a DMP is right for you. Here’s what it is and how it works.
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