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6 debt consolidation solutions in Ontario

Explore your options to consolidate debt in Ontario and find the best strategy for you.

Consolidating your debt can help make your finances more manageable. We break down the different options for debt consolidation in Ontario, including consolidation loans, balance transfer credit cards, debt management programs and debt settlement services. Learn more about which option could be the best fit for you.

1. Unsecured debt consolidation loan

An unsecured debt consolidation loan lets you borrow funds based on your credit score. You may be able to borrow up to $50,000, with no need to secure your loan with collateral or a cosigner. You’ll typically pay much higher interest if you apply with bad credit.

  • How much it costs. Rates start at 5.99% for good to excellent credit. You may pay up to 46.96% with bad credit. You could also owe origination fees, prepayment fees or late/NSF fees.
  • Best for. It’s good for people with good credit who don’t have an asset to secure their debt.
  • Pros. It comes with an easy application and flexible loan amounts. No assets are required for this loan. You can use funds to pay off any type of debt.
  • Cons. It comes with higher interest rates than secured loans. It is difficult to qualify with bad credit, and you can damage your credit score if you default.

Compare unsecured debt consolidation loans in Ontario

Loan providerLoan detailsEligibility requirements
Loans Canada
  • Loan amount: $300 – $50,000
  • Loan term: 3 - 60 months
  • Interest rate: 5.40% - 46.96%
Steady source of incomeGo to site

Read review

Parachute
  • Loan amount: $5,000 – $25,000
  • Loan term: 36 - 60 months
  • Interest rate: 19.99% - 29.99%
Min. credit score of 580, $5,000+ in debt, min. income of $30,000 annual

Read review

gopeer
  • Loan amount: $1,000 – $25,000
  • Loan term: 36 - 60 months
  • Interest rate: 8.00% - 33.92%
Recommended income of $40,000 /year, no payday loan debt, min. credit score of 600

Read review

LoanConnect
  • Loan amount: $100 – $50,000
  • Loan term: 3 - 120 months
  • Interest rate: 6.99% - 46.96%
Currents debts must total less than 60% of incomeGo to site

Read review

SkyCap Financial
  • Loan amount: $500 – $10,000
  • Loan term: 9 - 60 months
  • Interest rate: 12.99% - 39.99%
Min. income of $1,600 /month, stable employmentGo to site

Read review

Mogo
  • Loan amount: $200 – $35,000
  • Loan term: 6 - 60 months
  • Interest rate: 9.90% - 46.96%
Min. income of $13,000 /yearGo to site

Read review

QuadFi
  • Loan amount: $5,000 – $50,000
  • Loan term: 36 - 60 months
  • Interest rate: 5.99% - 18.99%
min. credit score 680, min. income $3,750/monthRead review
National Bank of Canada logo
  • Loan amount: N/A
  • Loan term: 6 - 60 months
  • Interest rate: 9.65% - 12.45%
Must be employed or have a source of income and good to excellent creditRead review
FirstOntario Credit Union
  • Loan amount: Not disclosed
  • Loan term: Not disclosed
  • Interest rate: 8.99% – 8.49%
Have a steady source of income and good to excellent credit

Best debt consolidation loans in Canada

2. Secured debt consolidation loan

Secure your loan with an asset such as your home or vehicle to get lower interest rates. Secured debt consolidation loans rely less on your credit score to qualify, so you can apply with good or bad credit. Just be aware that your asset can be repossessed if you default. The most common type of secured debt consolidation in Ontario is a home equity loan.

  • How much it costs. It starts at at 5.4%. You could also owe origination fees, prepayment fees or late/NSF fees.
  • Best for. It’s good for people with good or bad credit who own a valuable asset.
  • Pros. It comes with lower rates than unsecured loans and comes with higher loan amounts on average. You have a better chance of approval if you have bad credit.
  • Cons. You could lose your asset if you default. The amount you get approved for is typically tied to your asset’s value.

Compare secured debt consolidation loans in Ontario

Loan providerLoan detailsEligibility requirements
Loans Canada
  • Loan amount: $300 – $50,000
  • Loan term: 3 - 60 months
  • Interest rate: 5.40% - 46.96%
Steady source of incomeGo to site

Read review

LoanConnect
  • Loan amount: $100 – $50,000
  • Loan term: 3 - 120 months
  • Interest rate: 6.99% - 46.96%
Currents debts must total less than 60% of incomeGo to site

Read review

Fairstone
  • Loan amount: $5,000 – $50,000
  • Loan term: 36 - 120 months
  • Interest rate: 19.99% - 24.49%
Must be a homeownerGo to site

Read review

FirstOntario Credit Union
  • Loan amount: Not disclosed
  • Loan term: Not disclosed
  • Interest rate: 8.49% – 7.99%
Have a valid source of income, good to excellent credit and an asset for collateral

3. Balance transfer credit card

Move your debts from several different credit cards onto a balance transfer card with a lower interest rate. Balance transfer cards come with a very low promo offer and rates tend to increase after 6–10 months. You’ll typically pay a fee to transfer your balances.

  • How much it costs. The promotional rate is between 0% and 3.5%. After the promo, rates range from 8.99% to 19.99%. You could pay additional fees ranging from 1% to 3% of the amount transferred.
  • Best for. It’s good for people with good or bad credit who are dealing exclusively with credit card debt.
  • Pros. It comes with lower interest rates. You may be able to pay it off faster since less of the payment goes to interest. Many come with no annual fee.
  • Cons. It could have high balance transfer fees, and missed payments could incur higher interest rates. There are no same-bank transfers, and the promo offer will expire.

Compare balance transfer credit cards in Ontario

Credit card providerCredit card detailsEligibility requirements
BMO CashBack Mastercard
  • Interest rate: 22.99%
  • Balance transfer fee: 2%
  • Purchase interest rate: 20.99%
  • Annual fee: $0
  • Be a Canadian citizen or permanent resident who is at least 18 years old (19 in some provinces)
Tangerine World Mastercard
  • Interest rate: 19.95%
  • Balance transfer fee: 3%
  • Purchase interest rate: 19.95%
  • Annual fee: $0
  • Be a Canadian citizen or permanent resident who is at least 18 years old (19 in some provinces).
  • Have a minimum annual income of $60,000 or a household income of $100,000.
Tangerine Money-Back Credit Card
  • Interest rate: 19.95%
  • Balance transfer fee: 3%
  • Purchase interest rate: 19.95%
  • Annual fee: $0
  • Be a Canadian citizen or a permanent resident.
  • Be at least 18 years of age, or the age of majority in your province or territory of residence.
  • A minimum income of at least $12,000.
  • Have a credit score of 600 (a credit rating of good to excellent).
  • Clear of bankruptcies over the past 7 years.
Scotia Momentum No-Fee Visa Card
  • Interest rate: 22.99%
  • Balance transfer fee: $0
  • Purchase interest rate: 19.99%
  • Annual fee: $0
  • Be a Canadian citizen or permanent resident.
  • Be at the age of majority in province/territory of residence.
  • Have an annual gross income of at least $12,000 without declaring bankruptcy in the past 7 years.
MBNA True Line Mastercard
  • Interest rate: 12.99%
  • Balance transfer fee: 3%
  • Purchase interest rate: 12.99%
  • Annual fee: $0
  • Be a Canadian citizen or permanent resident who is at least 18 years old (19 in some provinces)

4. Consumer proposal

Consumer proposals are a formal, legally binding process administered by a legal firm called a Licensed Insolvency Trustee (LIT). The LIT works with you to develop an offer to pay creditors a percentage of what you owe or extend the time you have to pay off the debts (or both). These agreements cannot include secured debts like a mortgage or auto loan.

  • How much it costs. Consultations are free, but you may pay thousands of dollars in fees to set up your debt agreement, depending on how much you owe.
  • Best for. It’s good for people with bad credit who don’t qualify for debt consolidation loans or credit cards.
  • Pros. It reduces your overall loan amount or extends your payment period. Experts work with creditors on your behalf, and it stops punitive action by creditors. There’s also no interest.
  • Cons. It can significantly lower your credit score, and it doesn’t cover secured debts. Missed payments can cancel your agreement. It stays on your credit report for up to six years, and you may have to pay high fees.

Companies that help with consumer proposals in Ontario

Consultations are free. However, you’ll need to pay fees if you decide to go with their services.

CompanyOverview
Debt.ca
  • Online website that connects you with services offering debt consolidation in Ontario
  • No cost to get matched with providers
  • Doesn’t provide debt consolidation services or loans directly

Go to site

Hoyes, Michalos & Associates
  • Helps with credit counselling, bankruptcy and consumer proposals
  • Open since 1999, it has helped over 60,000 Ontario residents get out of debt
  • Free consultation, but fees are undisclosed
  • 99% creditor acceptance rate for consumer proposals
Kunjar Sharma and Associates
  • Helps with credit counselling, bankruptcy and consumer/corporate proposals
  • 40+ years of expertise, and online and in-person service are available in 10 languages
  • Free consultation, but fees are undisclosed
  • Over 6,000 consumer proposals filed, with a 99% creditor acceptance rate
Spergel
  • Helps with credit counselling, bankruptcy and consumer proposals
  • 30+ years of expertise with over 100,000 clients served
  • Free phone consultations, undisclosed fees
  • Open 7 days a week with 34 locations across Ontario

5. Debt settlement

Debt settlement firms negotiate on your behalf with your creditors. You’ll pay off your debt in one lump sum that’s lower than your remaining debts. Debt settlement will significantly decrease your credit score.

  • How much it costs. Consultations are free but you’ll often pay thousands of dollars in fees to set up your debt agreement, depending on how much you owe.
  • Best for. It’s good for people who can’t afford their debt and need to reduce how much they owe.
  • Pros. It stops punitive action by creditors (including lawsuits) and helps you avoid bankruptcy.
  • Cons. It may charge high fees, and it negatively impacts your credit score. Creditors can refuse to settle your debts. There could also be tax implications.

Organizations that help with debt settlement in Ontario

CompanyOverview
Debt.ca
  • Online website that connects you with services offering debt settlement in Ontario
  • No cost to get matched with providers
  • Doesn’t provide debt consolidation services or loans directly

Go to site

Credit Counselling Society
  • Has helped over 850,000 Canadians reduce or eliminate their debt since 1996.
  • Financial experts negotiate with your creditors to offer a one-time lump-sum payment to settle your debts.
  • Accredited non-profit so basic services are free of charge.

6. Debt management program

These services are typically provided by credit counsellors and debt management firms. Financial experts review your budget and negotiate with your creditors to consolidate your debts into an affordable payment plan, with little or no interest. Unlike debt settlement programs, you’ll still repay everything you owe, but your payments should be more affordable.

  • How much it costs. It’s free with a credit counselling organization, but you may have to pay for lawyers or other services as you progress through your debt management plan. You’ll typically pay a set-up fee and a monthly maintenance fee with a for-profit firm.
  • Best for. It’s good for people with good credit who want to limit damage to their credit score.
  • Pros. It consolidates your debts without additional loans and lowers your interest rates or extends your payment period. It does less damage to your credit score than debt settlement and stops punitive action by creditors.
  • Cons. It doesn’t usually cover secured debts like mortgages or auto loans. You may have to pay set-up or monthly maintenance fees. You’ll need to close any credit cards you include in your debt management plan.

Organizations that help with credit counselling in Ontario

These programs are usually non-profit, but you may have to pay fees for certain services.

Non-profitOverview
Credit Counselling Society
  • Has helped over 850,000 Canadians reduce or eliminate their debt since 1996.
  • Basic services are free of charge.
  • You may have to pay for lawyers or other services as you progress through your debt management plan.
Consolidated Credit
  • Has helped over 500,000 Canadians get out of credit card debt over the past 15 years
  • Free financial education resources and outreach programs
  • Positive reviews on Trustpilot

How to choose the right debt consolidation option for you

Think about these questions to help choose the right debt consolidation in Ontario:

  • What kind of debt do you have? If you have exclusively credit card debt, a balance transfer card might be the best option. For combined debts (loans, credit cards, etc.), you may want to go with a debt consolidation loan or debt management/settlement plan.
  • Do you qualify for financing? Are you struggling to get approved for a debt consolidation loan or balance transfer card? Try to qualify with a few providers, and if you’re not successful, you may need to turn to debt management or settlement.
  • How big is your debt? For smaller amounts, consider financing or a debt management plan. For larger amounts, especially over $100,000, you may want to go with a debt settlement or a consumer proposal.
  • Can you still afford your debt? If you’re still making all your payments on time, financing or a debt management plan could be a good fit. Choose debt settlement or a consumer proposal if you need a lower monthly payment.
  • Do you have an asset to secure your loan? Secured debt consolidation loans let you secure your loan with collateral such as your house or vehicle to get lower rates. Just be aware that your asset can be repossessed if you default on your payments.
  • How much do you want to pay? You’ll end up paying fees (or interest rates) with most forms of debt consolidation. To avoid paying too much, your best option is to ask about fees ahead of time to get the best rate or go with a non-profit credit counselling service.
  • Can you live with a lower credit score? Some types of debt consolidation can severely damage your credit. Avoid debt settlement and consumer proposals if you need to maintain a good credit score.

Ontario personal finances at a glance

Niagara FallsOntarians have a significant amount of debt when compared to the average income across the province. Services to consolidate debt in Ontario are designed to help average citizens reduce or manage their debt.

Debt in Ontario

According to Equifax, the average non-mortgage debt for Ontario residents in the first quarter of 2022 was $20,878. Residents of Toronto carry a slightly lower amount of debt ($19,904) for the same period, while the average level of debt for people across Canada was $20,744.

Income in Ontario

According to Statistics Canada, the average income in Ontario was $41,200 in 2020.
If you break totals down by city, the average income varies slightly:

  • Toronto was $39,600
  • Ottawa was $50,000
  • Hamilton was $42,400

This includes all types of income, such as employment, rental, investment, retirement and government benefits.

Frequently asked questions

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