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Compare debt consolidation loans

Simplify your debts into one single monthly repayment with lower costs and better terms.


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The journey to become debt-free can be smooth for some — but for many of us, it includes bumps, twists and turns. However, strategies exist to help you navigate your way to living a debt-free life.

A debt consolidation loan is one strategy to help you get a handle on your debt. You can potentially gather your debts into one place, shorten your loan term and possibly get a better interest rate. It all comes down to whether it’s right for your specific financial situation.

Compare debt consolidation loan options

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score Link
Loans Canada Debt Consolidation Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
3-60 months
No application or origination fees
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More Info
Marble Fast-Track Loan
19.44% – 31.90%
36-84 months
Legal and admin fees of $295 - $1,500 (based on size of loan)
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More Info
Marble Financial offer credit builder loans in amounts from $5,000 to $20,000. Improve your financial health within 36 months. This loan is strictly for borrowers exiting a consumer proposal.
LoanConnect Personal Loan
6-60 months
No application or origination fees
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More Info
LoanConnect is an online broker that matches borrowers to lenders offering loans in amounts from $500 to $50,000. Get approved for multiple loan offers from different lenders in as little as 60 seconds with any credit score.
Fairstone Debt Consolidation Loan
19.99% - 39.99%. Varies by loan type and province
6 months - 10 years
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More Info
Consolidate your debt up to $20,000 for an unsecured loan and $35,000 for a secured loan.

Compare up to 4 providers

How does consolidating debt with a personal loan work?

A debt consolidation loan can help you roll your existing debts into one new fixed monthly repayment. The goal is that your new loan offers a lower interest rate than you’re currently paying on other loans and/or better loan terms.

To take advantage of a debt consolidation loan, you will need to apply for a personal loan and select “debt consolidation” as the purpose on your application. The lender will transfer your approved funds into your bank account, which you then use to pay off your open debts — whether that is credit card balances, bills or other loans.

After paying off your debts, you’re left with one single loan to repay.

Debt Consolidation Savings Calculator

Calculate how much you could save by consolidating your debt

Your current balances
1) Debt amount Interest rate
2) Debt amount Interest rate
3) Debt amount Interest rate
Total monthly payments
Add another balance
New loan terms
Loan length in years

Fill out the form and click “Calculate” to see your estimated savings and new monthly payment.

You’ll save an estimate of !

Before Consolidation After Consolidation
Balance $ $
Interest rate % 9%
Year(s) to pay off ~
Monthly payment $ $
Total interest paid
Total balance paid

You currently have a total debt balance of $ with an average rate of %. By consolidating them into a new loan at 9% APR with a -year term, you’d pay approximately $ per month. Your estimated total savings would be .

Your total monthly payments is not enough to cover the interest. Your loan(s) will never be paid off.

What is debt consolidation and how does it work?

Factors to consider when comparing loans

When finding the right debt consolidation loan for your financial situation, it’s important to compare a variety of different loans and lenders. Consider the following factors:

  • APR. Interest rates and fees combine to show you the annual percentage rate of your loan, which is the true cost of your loan. Compare a variety of loan APR’s to see how much you could save over time by paying different rates and fees.
  • Loan amounts. Bundling together your debts is part of the appeal of debt consolidation, since you’ll be able to make one single monthly repayment instead of multiple payments. Find a lender who is willing to offer you the amount you need in order to bundle all of your debts together.
  • Fees. Origination fees, early repayment penalties, late and returned payment fees — these can all eat away at how much you can save when moving your debts to one single loan. Compare the fees offered by lenders and see if you can negotiate out of any.
  • Borrower reviews. Reviews can help you evaluate a provider’s marketing and customer service against real-life customer experiences, providing insight into what you can expect from a lender.

4 questions to ask when comparing offers

Narrow down your loan options by asking yourself these questions:

  • Do I qualify with this lender?
    People with good or excellent credit scores tend to more easily qualify for personal loans with competitive rates. You’ll likely need to meet eligibility that includes a maximum debt-to-income ratio and a minimum credit score, annual income and length of credit history.
  • What’s the repayment term?
    Since the goal of a debt consolidation loan is to combine your debts into one single payment, your loan term represents when you’re ultimately free of your debts. How long you take to repay your loan will affect your monthly payment and the total cost of your loan. A longer term generally results in lower monthly repayments, but a higher loan cost.
  • What’s the APR?
    Lenders charge a percentage of your loan balance as interest in exchange for allowing you to borrow money. They commonly advertise an APR, which includes both interest and mandatory fees. The APR is a better representation of your total loan cost than your interest rate alone. Even a seemingly small difference in percentage can significantly affect the total interest you pay, especially if you’re borrowing a large amount.
  • What other fees might I be charged?
    Outside of your APR, you could face a range of fees. Some lenders even charge you extra for paying off your loan early. Read the terms and conditions of any loan contract before signing so you understand any fees or charges you may incur.

How much will a debt consolidation loan cost me?

Ideally, a debt consolidation loan won’t cost you anything you weren’t already going to pay in interest with your existing loans.

  • While some debt consolidation loans come with origination fees — usually 1% to 5% of your loan amount that’s often deducted before you receive the money — it’s possible to find a consolidation loan offering no upfront fees.
  • When weighing consolidation loans, your APR and monthly repayments are two other costs to consider. Typically, you need to have excellent credit and a low debt-to-income ratio to qualify for the lowest APRs that range from 4% to 12%.
  • You might be concerned about immediate costs. If this is the case, a loan with a longer loan term could meet your needs. You’ll end up paying more over the life of your loan, because your interest accumulates over a longer term. However, your monthly repayments can be significantly lower than with a shorter term.

5 tips to get a low interest rate

Consider these tips to get a better rate when consolidating your debt with a loan:

  1. Shop around. Don’t just look at local banks. Online lenders can offer lower rates, faster application processing and even peer-to-peer lending opportunities. Don’t limit yourself to only the online world or companies with physical locations.
  2. Know your credit score and review your credit report. Generally, you need a credit score of 650 or higher to get a good deal on a loan. Check your credit report to make sure there aren’t errors that are hurting your credit score.
  3. Pay down your debt. Try to keep your debt-to-income ratio under 20% to get the best rates and terms. Lenders will generally not give out loans to borrowers who have a DTI of 43% or higher.
  4. Get preapproved. Preapproval allows you to see how much you can borrow and approximate your interest rate before committing to an offer. It’s also a good way to make sure you meet a lender’s eligibility requirements.
  5. Apply only for what you need. Asking for more than you need can land you with a higher APR and will increase the cost of your loan, since you’ll pay interest on the amount you borrow.

Pros and cons of using a debt consolidation loan


  • One payment. Bundling together all of your debts into one place can relieve the hassle that comes with managing multiple monthly repayments.
  • Potential overall savings. When you consolidate to a loan with a lower APR, you can save money on unnecessary interest and fees across multiple loans.
  • Earlier payoff. Depending on your term and APR, you might find that you’re able to pay off your overall debt more quickly than by keeping them separate.


  • No intro period. Unlike balance transfer credit cards, debt consolidation loans don’t offer low or 0% introductory interest rate periods, which means you’ll incur interest immediately with a loan.
  • Temptation to spend. With your credit cards and general cash flow freed up, you could be tempted to shop, thereby increasing and extending your debt.
  • Does not eliminate debt. By consolidating your debt, you’re simply shifting existing balances to a new form — however it is one that can hopefully save you money and time.

Balance transfer credit card vs. debt consolidation loan

Balance transfer credit cards can offer exciting perks, like 0% or low interest for a specified number of months on transferred balances. However, once the intro period is up, you’ll face a higher revert APR.

Here’s how balance transfer credit cards compare to debt consolidation loans.

Balance transfer credit card Debt consolidation loan
APR Low or 0% interest on transferred debt within an intro period, and typically 12.99% to 36% thereafter. As low as 3% APR throughout your full loan term.
Payoff time Intro periods can range from 3 to 12 months, sometimes longer, after which your APR reverts to a higher purchase rate. Generally 3 to 7 years.
Fees Typically 1% to 5% of each transferred balance. Typically no upfront fees, though lenders may charge origination fees of 1% to 5% of the loan amount.
Impact on credit score Short-term drop in score due to hard pull on credit to approve you for the credit card. Potential increase in credit score over time if you keep your other cards open to maintain low credit utilization ratio. Short-term drop in score due to hard pull on credit to approve you for the loan. Likely to increase credit score in the long run, because other credit balances are paid off with the loan.

So, what’s better?

  • A balance transfer credit card could be a suitable way to consolidate debt if you’re certain you’ll pay off your consolidated balance within the introductory interest rate period.
  • If you need more time, a debt consolidation loan could be a better deal because the interest rate is lower.

Russell consolidates to save his budget

Imagine this scenario: Russell is carrying two credit cards — one that he’s nearly maxed out to pay emergency bills and another filled with general spending — along with a low interest rate loan. With a new job and a determination to get his debt under control, Russell looks into a debt consolidation loan.
Original credit accounts
Credit card 1 Credit card 2 Loan Total
APR 22.8% 15.2% 5%
Balance $5,000 $2,000 $600 $7,600
Monthly payments $280 $100 $10 $390
Total interest $1,349.51 $320.92 $91.87 $1,762.30

Consolidated debt

After consolidation
APR 9%
Balance $7,600
Monthly payment $241.68
Total interest $1,100.40

Russell saves $661.90 by consolidating his debt to a three-year term personal loan offering a fixed 9% APR.

Bottom line

A personal loan could help you consolidate multiple debts into one single monthly repayment — potentially one with lower rates and fees or shorter terms than you’re paying now. Before you apply for a loan, compare multiple lenders to find one that works best for your financial situation.

Frequently asked questions

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