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Guide to Debt Consolidation Loans in Canada

The solution you’re seeking can be debt consolidation. Do you find it difficult to remember your bills and their associated payments? Do you frequently pay interest on your credit card amount, but it never decreases? Consolidating your debt relieves you of the constant hassles and can hasten the repayment of your bills. You may even be able to bargain for lower interest rates in some cases to save money over the long haul. But what does debt consolidation entail?

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Canada Debt Consolidation

One of the concepts that cause a lot of uncertainty for Canadians is Debt Consolidation. You’ll know more about debt consolidation after reading this simple guide than the majority of Canadians:

  • What is a debt consolidation loan and how does it work?
  • What is a debt consolidation program?
  • Is a debt consolidation loan a wise move?
  • Advantages and disadvantages of debt consolidation loan
  • What are the options for a debt consolidation loan?
  • What caused the rejection of my debt consolidation loan?

What is a debt consolidation loan and how does it work?

Debt consolidation is the process of consolidating two or more debts into one. Some people opt for a home equity loan, debt consolidation loan, or credit card balance transfer, although these frequently need excellent credit or high income. Some may even make your financial situation worse.

The Office of Consumer Affairs (OCA) of the Government of Canada states that a debt consolidation loan enables you to pay off all of your creditors at once and is often obtained from a bank. 

You will only have to make one monthly payment as a result, frequently at a lower interest rate than you are currently paying. This enables you to pay off your loan more quickly and save money on interest fees.

Debt Consolidation Program

What is a Debt Consolidation Program?

A non-profit credit counseling organization and your creditors come to terms with a Debt Consolidation Program (DCP). If you work with a reputable, non-profit credit counseling organization, a licensed credit counselor will speak with your creditors on your behalf and try to reduce the interest rate on all of your unsecured loans while also consolidating them into a single, more manageable monthly payment. A Debt Consolidation Program is one solution that helps Canadians get out of debt.

Is a debt consolidation loan a wise move?

You can intentionally decide to consolidate your debt for several reasons. First off, debt consolidation can assist in preventing missed payments, harm to your credit score, and higher interest rates if you have several high-balance credit accounts and find it challenging to make payments on time. If you’re in this situation, you might also want to consider automating your monthly payments because it’s a quick and easy way to reduce your worry and expenses.

In general, more Canadians are turning to strategies like debt consolidation and consumer recommendations rather than filing for bankruptcy to get out of significant debt problems. Thousands of Canadians use debt consolidation to lower their debt each year

Ontario Debt Consolidation

Advantages and disadvantages of debt consolidation loan

The pros of debt consolidation

Debt consolidation loans are available from credit unions and large Canadian banks like BMO, CIBC, RBC, TD, and Scotiabank. Here are some advantages to consider while assessing the benefits and drawbacks of debt consolidation with a loan:

  • Single Monthly Payment. The stress of remembering to pay many bills with due dates is lessened by making a single monthly payment.
  • An interest rate reduction. While this is often accurate, you should always conduct your research to make sure it is lower than the average interest rate on your obligations.
  • Debt can be paid off more quickly. As a result of paying more on the principal while the interest rate is lower, you can pay off your debt more quickly.
  • No fees are charged. When taking out a debt consolidation loan, there are ordinarily no additional fees.

The cons of debt consolidation

Debt consolidation loans can be challenging to receive, and if you don’t have good money management and monthly budgeting abilities, they might even make your debt worse.

  • They frequently demand security. Top-tier lenders would probably reject your application for a consolidation loan if you don’t have any assets, do not own property, or can’t find a co-signer.
  • You require an acceptable credit score. Reputable businesses won’t approve you without a credit check. You’ll probably be refused or charged higher interest rates if your credit score is low.
  • Potentially high-interest rates. Interest rates for high-risk borrowers can range from 14% to over 30% with second-tier lenders, which might be detrimental rather than beneficial.
  • They might make you incur more debt. By using the accounts they’ve paid off while also needing to repay, many people accumulate further debt.

What are the options for a debt consolidation loan?

Having to take on more debt to pay off your current debt doesn’t appeal to you? Or was your request for a debt consolidation loan turned down? Here are the options for a debt consolidation loan:

  • Credit line for home equity. Using a Home Equity Line of Credit (HELOC) properly can be a beneficial tool if you can secure a loan using these “second mortgages” and the equity you have built in your property.
  • Transfers of credit card balances. Balances from many credit cards can be combined into one card with a cheaper interest rate. The disadvantage of credit card debt transfers must be understood.
  • Credit lines. You might be able to obtain a line of credit from your bank using collateral and use it as a form of debt consolidation solution.
  • Debt consolidation program. The final option for consolidating debt? Joining a debt consolidation program, often known as a credit counseling program or DCP. In that the DCP provider will combine your various balances into a distinct lending account with its interest rate, DCPs are comparable to debt consolidation loans from banks or other private lenders in this aspect.

What caused the rejection of my debt consolidation loan?

If your application for a debt consolidation loan was denied, it signifies that potential lenders had doubts about your ability to return the money you borrowed.

Consider the situation from the perspective of a lender. What are the possibilities that you will return the money? You might be a fantastic softball player at church or a good neighbor, but how well do you handle money? What does the ratio of your debt to income look like? What is your credit rating?

Recognize the reasons behind why those figures are working against you and how to make them on your side. Here are some things to consider:

  • Low income. The figure that might be most important is income. A creditor can question why they should grant you another loan if your income is insufficient to cover your current obligations.
  • Too much debt. You will require more money to borrow the more debt you have. A $5,000 loan can be granted far more easily than a $50,000 loan. Your income will be taken into consideration once more in the form of a debt-to-income ratio (DTI). Your DTI should be around 36%, which indicates that only approximately a third of your monthly income is going toward debt repayment.
  • Bad credit score. A credit score serves as a risk indicator. It provides information to the lender about your credit usage, whether you have been paying bills on time, and your probability of repaying a loan. Creditors use this figure to assess your level of financial responsibility, so if you’re having trouble paying off debt, particularly credit card debt, there may be a problem.

Talk to us! We will help you get out of debt.

We will help you reduce as much as 75% of your debts and consolidate it into a single affordable monthly payment. Your creditors will stop harassing you and all interest will freeze if you get into our Ontario Government Debt Relief Program.

Many Ontarians are already benefiting from our Debt Relief ProgramYOU should too!

Find out how much you can write off portion of your debts by getting your Free Savings Estimate below. A debt specialist from National Debt Relief Services in Ontario will discuss all options and provide you tailor-fitted Debt Relief Program.

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Jennifer Chenier
Jennifer Chenier
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I was lost ... single mom... off due to Covid for 3 months .. did what it took to pay bills and look after my kids... and left with nothing but a tonne of debt I could not keep up with 😢. And then ....I met Connie.. Connie gave me my life back. The entire experience was like talking to my mother. She was full of compassion and knowledge and took me under her wing for this entire process. She turned tears into smiles and hope . She reassured me.. and made me feel like it was Going to be ok. I can’t thank her and the team (Paul) enough for helping me through this . I highly recommend National Debt Services to anyone looking for help with their debt . Start living again ❤️. Thanks Connie Jen
Katherina Preston
Katherina Preston
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"So glad I finally had the courage to make the call" Suma was amazing.. she guided me through my options and got the answers to all my questions. By the end of our very first phone conversation I had hope again...finally...no more sleepless nights worrying my debt ....Thank you National Debt Relief Services
Chris V
Chris V
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I would just like to thank Suma for really making feel comfortable throughout this entire process. Everyone tells you to watch out for gimmicks, quick fixes, and everything else that comes with Debt. Ive had other companies who had made promises and under delivered. However Suma and her team are quick to provide the right answers and guide everyone in a way towards better credit. She has made it seamless with great communication and availability. I have personally referred her to several of my closest friends and i would recommend her to anyone else looking for consolidation.

Top 5 Key Benefits of our Ontario Debt Relief Program:

To know more what you can benefit from our Ontario Debt Relief Program, simply try our Debt Consolidation Calculator below and one of our debt specialists will get in touch with you and provide you the best debt relief option that fits your situation.

Do you want to experience Peace of Mind from all of these?

  • Credit Card Debts
  • Personal Loans
  • Car Loans
  • Taxes
  • HST
  • 407
  • Household Bills
  • Payday Loans
  • Student Loan
  • and more…

Talk to us! We will help you get out of debt.

We will help you reduce as much as 75% of your debts and consolidate it into a single affordable monthly payment. Your creditors will stop harassing you and all interest will freeze if you get into our Ontario Government Debt Relief Program.

Many Ontarians are already benefiting from our Debt Relief Program, YOU should too!

Find out how much you can write off portion of your debts by getting your Free Savings Estimate below. A debt specialist from National Debt Relief Services in Ontario will discuss all options and provide you tailor-fitted Debt Relief Program.

We will help you compare
the options and savings of all formal debt relief programs available to you.


No contact details required to find out if you qualify

Frequently Asked Questions

A Debt Consolidation is a negotiated debt settlement offer made between you and your creditors with the help of a Debt Relief Agency in Ontario. Some key benefits of Debt Consolidation are interest-free program, no upfront fee required, combined monthly payment into one affordable amount, no lawsuits, and many more.

Yes, your assets are safe from creditors. A licensed debt relief agency in Ontario will help you come up with an offer to your creditors that will make sure your assets will be out of the paper.

No, in fact, this is one of the great advantages of a Debt Consolidation Program. All wage garnishment will stop from the day you filed the proposal.

The effect on your credit score is not going to be severe. Your credit score will most probably go to R7 Rating and will remain in your credit report for another 3 years after you completed the program. This means that it will not be permanent and you will still be able to rebuild your credit score.


This varies depending on the proposal you will be discussing with the help of a certified debt relief agency. It is also worth noting that debt consolidation cannot exceed more than 5 years.

If a debt is shared, you need to file a joint debt consolidation offer to your creditors. However, in most cases, in which the debts are individually incurred will have no impact on your spouse.

After three missed payments, your debt arrangement with creditors will be broken and you will end up getting chased again for the original debt amount plus interest.

A debt consolidation offer can be paid off earlier if you can. In this way, you receive your “Certificate of Completion” sooner and you can immediately start rebuilding your credit score. 

National Debt Relief Services Ontariois a certified Canadian Debt Relief Agency that offers FREE CONSULTATION to your debt consolidation needs. We value the trust given to us by our clients by making sure your personal information is confidential and private. Our personalized plans are designed to tailor fit your financial capacity. Our specialists will get in touch with you by simply answering a few questions thru the link provided below.

Why Trust National Debt Relief Services?

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Dawn Friesman
Dawn Friesman
I've been working with Allicia Macdonald shes very professional and sweet. I cant thank her enough for helping me rebuild my life. Thank you so much.
Chantal Rolfe
Chantal Rolfe
Today I had a wonderful experience with Rachael, she was Very professional I was very happy with what we talked about today she was very Caring I highly recommend national debt relief services hundred percent😃
Jennifer Magill
Jennifer Magill
Brittany was awesome, she explained everything clearly and offered solutions every step of the way. It’s always nice to hear that you could do this or that, I didn’t feel forced to do anything and was able to decide clearly. Thank you 🙏🏼
Dave Tonnos
Dave Tonnos
This company will work with you and through any difficulties that may arise. They actually hold themselves accountable, how refreshing during troubling economic times.
marian kamara
marian kamara
I have a great experience working with Suma, she work me through the program, takes her time to explain everything to me about how the program work, what I need to do from start to end of the process. I’m so thankful to God for sending an angel Suma to help relief my debt. It’s a great company to work with. I will recommend this program for anyone in debt like me.
Donna Hutchings
Donna Hutchings
Connie B. was absolutely awesome! She explained everything in detail to me. Very professional to work with and takes the time with you. She really has compassion. So glad she helped me out. Thank you
lynn collins
lynn collins
Joel has made this so simple and effortless he made sure i was well informed and making the right decisions for my situation i would recommend joel at national dept Relief to anyone in hardship with there bills thanks alot joel i really appreciate everything you have done for me thanks!! 5 stars for sure! and its chad ball not my mom lynn lol
Billy Bong
Billy Bong
I had a great experience with Brittany, so helpful and understanding. Never felt like I was being pressured or rushed into anything. She was always there with answers to my questions. Thanks for all the help and peace of mind you helped me achieve.
Amber-lyn Miller
Amber-lyn Miller
Let’s Just Put It Simple....... Not All Hero's Wear Caps........I spoke with Suma over a fairly lengthy period of time because of my busy schedule and lack of free time on my part, and she was not only extremely patient and understanding, but also beyond helpful And informative. Any question I had and no matter how many times she had to explain it to me she took her time to make sure I completely understood every single step and process before she moved on to the next thing. I have been so stressed out and worked up about my debt and trying to figure out how to fix it all since I know I will not be returning to work at all in the future because of medical issues and being 26 with that realization makes things just that more stressful but Suma made everything so easy and my payments are $100 a month for less then 5 years with no interest or penalties for early pay off. I’m so glad that I didn’t settle with some other place that was asking for $350 + a month for 7-12 years and paying off early would cost you more.
Jessica Preston
Jessica Preston
Caroline F. was phenomenal, she was so helpful, understanding and compassionate. Caroline did not make me feel bad for my mistakes, she was supportive and caring, she helped me through this dark time in my life I'm so incredibly happy I crossed paths with her. Thank you Caroline for being so wonderful to me! <3

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