The best debt consolidation loans in Canada help you manage your payments and save money. Banks and credit unions offer debt consolidation loans for people with good to excellent credit. This guide focuses on alternative lenders that offer some of the best debt consolidation loans in Canada online for people who can’t or don’t want to qualify with a traditional lender.
Finder experts collected more than 70 points of data for more than 60 lenders operating in Canada. Finder used this data to create a proprietary weighting formula that scores each lender based on rates, fees, terms, loan amounts, application process, funding speed, customer support, and reputation, among other features. The providers shown on the best list are those who scored highest based on this data-driven methodology. They are providers that are available and not available through Finder, with partners listed first. These loans are not representative of the entire market. Read more about the Finder personal loan ratings and review methodology.
We also completed the Finder: Personal Loans Best-in-Class Awards 2024 and the Finder: Personal Loans Customer Satisfaction Awards 2023, which recognize the top personal loan lenders in Canada.
If you are struggling to get approved for a consolidation loan and currently experiencing financial hardship, it may be time to consider debt relief options. Debt relief providers can help you find a personalized solution to make your debt payments more manageable.
Debt relief provider
Time to debt-free
Services provided
Requirements
12 - 60 months
Connects you to credit counselling, debt management, debt consolidation, consumer proposal and more
$10,000+ in unsecured debt & a hardship that's preventing you from paying your creditors
Learn more about each loan, including why it won, where it’s available and what to watch out for.
1. LoanConnect
LoanConnect is an online loan search platform. It maintains a large database of lenders that can finance borrowers with good or bad credit. Lenders are generated based on your unique profile.
Best suited for: All types of borrowers looking to receive and compare multiple offers
APR: 8.99% - 46.96%
Loan amount: $500 – $35,000
Loan term: 12 - 60 months
Loan types: Secured and unsecured debt consolidation loans
Eligibility requirements: Currents debts must total less than 60% of income
Accepts bad credit: Yes
Where it’s available: All provinces
Why it’s one of the best
LoanConnect made it to the Top 15 Most Recommended personal loan providers in the Finder: Personal Loans Customer Satisfaction Awards 2023. It is a BBB-accredited company that works with multiple lenders to help you find the best debt consolidation loan for your situation. It’s free to use. Starting rates are low, ringing in at 8.99%.
Loan decisions are based on factors like your credit score, income and current debts. People with a past bankruptcy or consumer proposal can also apply.
Loans Canada is an online loan search platform based in Toronto, Ontario. It finds loans for all types of borrowers, including people with fair or bad credit. Its platform is free to use. Fill out one online application in less than 10 minutes to get matched with lenders open to financing you.
Best suited for: People with fair to bad credit who want to search the largest lender network
APR: 6.99% - 46.96%
Loan amount: $300 – $50,000
Loan term: 4 - 60 months
Loan types: Secured and unsecured debt consolidation loans
Eligibility requirements: Steady source of income
Accepts bad credit: Yes
Where it’s available: Across Canada
Why it’s one of the best
Loans Canada was the finalist in the best personal loan search platform category in the Finder: Personal Loan Customer Satisfaction Awards 2023. It has the largest network of lenders in Canada to help you find the best debt consolidation loan for your needs. Rates start low at 6.99% for good to excellent credit.
The company is accredited by the Better Business Bureau (BBB) and you can apply with any credit score. Just be aware that you may pay much higher interest when applying with bad credit.
Spring Financial is one of the more established direct alternative lenders in Canada. Its primary product is its unsecured personal loan, which you can use for debt consolidation.
Best suited for: Borrowers with bad credit looking for fast approval and funding
APR: 10.8% - 46.99%
Loan amount: $500 – $35,000
Loan term: 6 - 60 months
Loan types: Secured and unsecured debt consolidation loans
Eligibility requirements: Min. income of $1,800 /month, 3+ months employed
Accepts bad credit: Yes
Where it’s available: All of Canada
Why it’s one of the best
Spring Financial made it to both the Top 15 Most Recommended and the Top 15 Best-Rated personal loan providers in the Finder: Personal Loans Customer Satisfaction Awards 2023. Its debt consolidation loans are widely available in Canada. Fill out out a quick online application and get a response right after. Rebuild your credit score as you make on-time payments, and repay the loan in its entirety early without any penalties.
SkyCap Financial is an online private lender that provides debt consolidation loans. Instead of fixating on your credit score, it takes a more holistic approach to approving applications by looking at factors such as your credit history, employment and income.
Best suited for: People with fair to bad credit who want friendly, professional customer service
APR: 12.99% - 39.99%
Loan amount: $500 – $10,000
Loan term: 9 - 36 months
Loan types: Unsecured debt consolidation loans
Eligibility requirements: Min. monthly income of $1,666.67, full time employment/pension, min. credit score of 575
Accepts bad credit: No
Where it’s available: All provinces and territories except Quebec and Nova Scotia
Why it’s one of the best
Spring Financial made it to both the Top 15 Most Recommended and the Top 15 Best-Rated personal loan providers in the Finder: Personal Loans Customer Satisfaction Awards 2023. This lender offers holistic loan decisions that don’t discriminate against borrowers with less-than-perfect credit. It lets you borrow up to $10,000 and offers near-instant loan decisions with official approval in as little as 24 hours.
SkyCap Financial is BBB-accredited and has received positive feedback from its clients. It has a solid online presence and offers its customers access to an exclusive financial literacy course to help them improve their finances.
Lower starting rate than other alternative lenders
No prepayment fees
What to watch out for
High rates for bad credit
Higher rates than traditional lenders
May not improve your credit score
5. goPeer
goPeer is an online P2P lending platform that connects Canadians looking for a loan with other Canadians looking to lend money. Interest is paid directly to the people who fund your loan. Borrow up to $35,000 with goPeer’s online loans to repay your debt.
Best suited for: People with good to excellent credit looking for competitive rates
APR: 8.99% - 34.99%
Loan amount: $1,000 – $35,000
Loan term: 36 - 60 months
Loan types: Unsecured debt consolidation loans
Eligibility requirements: Recommended income of $35,000/year, no payday loan debt, min. credit score of 600
Accepts bad credit: No
Where it’s available: All provinces
Why it’s one of the best
goPeer is a peer-to-peer network that strives to offer better interest rates than the competition. It offers low-cost loans to borrowers with strong finances.
Since it operates online, goPeer also cuts down on operating costs and transfers those savings back to borrowers. The platform is fully regulated and any interest on your loan goes to helping other Canadians reach their investment goals rather than benefiting the bank.
Apply for a Mogo Personal Loan of up to $35,000 with terms ranging from 6 - 60 months. If you return the principal within 100 days, you can get your paid interest and fees back.
Best suited for: People looking to get quick online quotes with no impact to credit
APR: 9.90% - 46.96%
Loan amount: $500 – $35,000
Loan term: 6 - 60 months
Loan types: Unsecured debt consolidation loans
Eligibility requirements: Min. income of $35,000 /year, min. credit score of 600
Accepts bad credit: Yes
Where it’s available: BC, AB, SK, MB, ON, NB, NS, PE, NL, YT, NT, NU
Why it’s one of the best
Mogo made it to the Top 15 Best-Rated personal loan providers in the Finder: Personal Loans Customer Satisfaction Awards 2023. Mogo offers flexible online loans for good and bad credit. Its 100-day money-back guarantee is a unique perk available to borrowers of the standard Mogo Personal Loan and MogoMini line of credit. You can pay off Mogo loans at any time without penalty.
Aside from its loan products, Mogo offers opportunities to grow your wealth through its Moka app and MogoTrade app.
Not all borrowers are eligible for the 100-day trial
7. easyfinancial
easyfinancial is one of the biggest and most well-known alternative lenders in Canada. It offers debt consolidation loans online and in hundreds of branches across Canada. It has been in business since 2006 and its parent company, goeasy, is listed on the Toronto Stock Exchange. It serves borrowers who need easy requirements from a lender, so expect to encounter steep interest rates if you apply for an easyfinancial loan.
Best suited for: Borrowers with bad credit looking to consolidate high-interest loans
APR: 9.99% - 46.96%
Loan amount: $500 – $100,000
Loan term: 9 - 120 months
Loan types: Unsecured debt consolidation loans
Eligibility requirements:
Accepts bad credit: Yes
Where it’s available: all provinces
Why it’s one of the best
easyfinancial offers both secured and unsecured personal loans you can use to consolidate debt. It has a streamlined online application process so you can get approval in as little as 10 minutes. Improve your credit score as you make on-time payments. If you have a co-applicant, you are eligible for a 2% rate reduction.
Other benefits
BBB accredited with an A+ rating
Fast approval and funding
Rebuilds credit score
What to watch out for
Could lose your home if you default on a secured loan
Steep interest rates
8. AAR Financial
AAR Financial provides secured and unsecured debt consolidation loans. It has served over 10,000 customers since 2003 and is based in Winnipeg, Manitoba. Get flexible loan amounts and loan terms.
Best suited for: Borrowers with low credit scores looking for a secured or unsecured loan
APR: 14.90% - 46.70%
Loan amount: $1,000 – $50,000
Loan term: 24 - 120 months
Loan types: Unsecured and secured debt consolidation loans
Eligibility requirements: Must be the age of majority in your province, with an active bank account, proof of employment and 3 pieces of ID.
Accepts bad credit: Yes
Where it’s available: MB, SK, AB, ON, BC
Why it’s one of the best
With 99% approval rate claim, AAR Financial serves as a legitimate solution when banks aren’t an option. It has BBB accreditation with an A+ rating. You can opt for a debt consolidation without needing to provide collateral, but if you want to increase your chances of approval or lower your interest rate, you can use your house as collateral.
AAR Financial also has a higher maximum loan amount than many alternative lenders, and you can get pre-approved without affecting your credit score.
Other benefits
Online application available
Has branches in Manitoba, Alberta and BC
Fast application process
What to watch out for
High rates for bad credit
Could lose your house if you get a home equity loan and default
9. Fairstone
Fairstone provides secured and unsecured personal loans that you can use for debt consolidation. It’s one of the biggest alternative lenders in Canada and is owned by Fairstone Bank of Canada, a Schedule 1 bank.
Best suited for: People with fair credit looking for quick quotes
APR: 19.99% - 39.99%
Loan amount: $500 – $50,000
Loan term: 6 - 120 months
Loan types: Unsecured debt consolidation loans
Eligibility requirements: , min. credit score of
Accepts bad credit: No
Where it’s available:
Why it’s one of the best
Fairstone is an established direct lender, having been around for almost 100 years. It is widely available in Canada, and you can apply online or in person. When you apply to Fairstone, you can choose between a secured and unsecured debt consolidation loan. Apply and get your no-obligation quote within minutes.
Other benefits
Completely online
Get funding in 24 to 48 hours
Get a loan offer with no impact on credit score
What to watch out for
Homeowners preferred
Higher rates for lower credit scores
Secured loans require a visit to the branch
10. Magical Credit
Magical Credit is an online-only private lender offering installment loans of up to $20,000. It has been providing loans since 2014 and has offices in Concord, Ontario, and North York, Ontario. Magical Credit doesn’t do direct debt consolidation, but you can still use its loan to pay off your smaller debts.
Best suited for: People with fair to bad credit receiving regular non-employment income
APR: 19.99% - 46.80%
Loan amount: $1,500 – $20,000
Loan term: 12 - 60 months
Loan types: Unsecured debt consolidation loans
Eligibility requirements: Min. income of $1,200 /month
Accepts bad credit: Yes
Where it’s available: Canada-wide (excluding Manitoba, Saskatchewan and Quebec)
Why it’s one of the best
Magical Credit made it to the Top 15 Most Recommended personal loan providers in the Finder: Personal Loans Customer Satisfaction Awards 2023. It offers an easy online application process and is open to many types of non-employment income, such as employment insurance, CPP, OAS, child tax credit and private disability benefits. To increase your chances on a debt consolidation loan, however, it’s better to have employment income in addition to your non-employment income.
Other benefits
Minimal to no documents required
A+ BBB rating
What to watch out for
High interest rates for bad credit
Must not have active payday loans
Debt.ca debt relief options
Debt.ca is a service for people who are greatly struggling with their finances. It does not offer debt consolidation loans but instead connects people to the more serious debt consolidation options, such as debt management programs and consumer proposals.
Best suited for: People experiencing financial hardship and can’t get approved for a debt consolidation loan
APR: Varies
Loan amount: N/A
Loan term: Varies
Loan types available: Debt.ca does not offer loans and instead will connect you to a service to help manage your debt
Eligibility requirements: $10,000+ in unsecured debt & a hardship that's preventing you from paying your creditors
Accepts bad credit: Yes
Where it’s available: All of Canada
Why choose Debt.ca
Debt.ca has been in business for over 20 years. It helps Canadians who are unable to repay their debts by connecting them to various debt relief options. It’s a solid choice for those who are seriously struggling with their finances and can’t qualify for any debt consolidation loans because they have bad credit and too much debt.
Consolidated Credit is a non-profit that helps Canadians who are experiencing financial hardship. It doesn’t provide any debt consolidation loans and instead helps people explore other debt relief consolidation options, such as credit counselling, debt management plans and consumer proposals.
Best suited for: People who can’t get approved for a debt consolidation loan and need relief from their credit card debt
APR: Costs vary
Loan amount: N/A
Loan term: N/A
Loan types available: Consolidated Credit does not offer loans and instead will connect you to a service to help manage your debt
Eligibility requirements: You need help getting out of credit card debt
Accepts bad credit: Yes
Where it’s available: Across Canada
Why choose Consolidated Credit
Consolidated Credit is an established non-profit that has been helping Canadians for over 15 years. It is BBB-accredited with an A+ rating and is also a member of the Canadian Association of Credit Counselling Services (CACCS) and the Ontario Association of Credit Counselling Services (OACCS). It’s available across Canada, and you can get a free consultation with a counsellor to discuss your current financial situation.
Fees vary based on the debt relief option you choose
How to get the best debt consolidation loan in Canada online
Compare lenders. Compare several features such as interest rates, fees, loan amounts, loan terms and eligibility requirements.
Apply to your best picks. Fill in the online applications to get personal loan pre-approval. You’ll need to provide personal details such as your name, contact information, housing information and employment. If you want to get multiple offers via one application, apply to a loan broker.
Compare offers. Compare quotes and choose the best offer.
Submit documents. If required, submit documents to your top choice to verify your income and identity.
Get approved. Get an official loan offer. Review the contract carefully, making sure you’re aware of how much the debt consolidation loan may cost you overall.
Get funded. Your debt consolidation lender will pay out your creditors, and you’ll make repayments to the lender.
Plans to get a debt consolidation loan in 2023
According to data released in the Finder: Consumer Sentiment Survey, fewer Canadians are focused on managing their debt with 3% planning to take out a debt consolidation loan in the third quarter of 2023, compared to 17% in the second quarter of 2023.
How to compare the best consolidation loans in Canada
To find the best debt consolidation loans, compare the following features:
Interest rates
Get an annual percentage rate (APR) that’s lower than what you’re currently paying for all your debts. If, for example, you’re paying 20% APR on credit card debt, and are offered a debt consolidation loan with a 39% APR to pay off that debt, you’ll pay more with the debt consolidation loan. That’s why it’s important to carefully compare the best debt consolidation offers and not simply assume you’re getting a better deal on a new loan.
APR is the annual interest rate plus fees you must pay to get the debt consolidation loan. Some lenders advertise the annual interest rate separately from the fees, but you should instead look at the APR so you know the total cost of the loan. Compare personal loan rates in Canada.
Fees
The best debt consolidation loans have little to no fees. Watch out for fees to process your loan, such as origination or admin fees, which may be included in the APR. Also look out for NSF fees ($25 to $50 is common), late payment fees (fixed dollar amount or a percentage of the outstanding payment), loan insurance and prepayment penalties (uncommon for debt consolidation loans).
Loan amounts
Choose a lender that can approve the amount you need. Lenders differ in how much they can offer a borrower. If you find that you can’t get approved for the full amount you need to consolidate your debt, it may still be worth consolidating even a part of it. Remember that the goal of getting the best debt consolidation loan is to save money and pay off your debt faster. Even a smaller consolidation loan can help accomplish that.
Loan terms
When deciding on the best debt consolidation loan in Canada for your needs, you’ll need to find the balance between monthly payments and the shortest loan term you can afford. Even if a long loan term and smaller monthly payments may seem appealing, you could end up spending a lot more money in interest in the long run.
Eligibility requirements
If you have fair or bad credit, focus on lenders that specialize in loans for your credit score. Many of the best lenders listed in this guide also offer bad credit debt consolidation loans in Canada, including Loans Canada, SkyCap Financial and LoanConnect. If you have good to excellent credit, focus on lenders that offer low-interest loans.
Reputation and customer service
Lenders of the best debt consolidation loans will not pressure or rush you to sign and will make sure you understand the terms of your loan.
Improves credit score
The best debt consolidation loans will increase your credit score as you make on-time payments. Prioritize lenders that report payments to the credit bureaus.
Secured vs unsecured
An unsecured debt consolidation loan is the more common way to consolidate debt, but some lenders also offer secured debt consolidation loans.
Pros and cons of a debt consolidation loan
Pros
One payment. Easily track your expenses and never miss a deadline with one easy-to-manage payment.
Save on interest. The best debt consolidation loan in Canada for you will come with a lower rate than what you currently pay.
Boost your credit. Pay off all of your debts and make on-time payments on your new loan to increase your score.
Earlier payoff. Depending on your term and APR, you may find it’s faster to pay off your debts with a fixed monthly payment (instead of a minimum payment).
Cons
Does not eliminate debt. Even if you get the best debt consolidation loan, you’re shifting existing balances to a new loan.
Can hurt your credit. Using a debt consolidation loan to pay off credit cards or lines of credit could leave you to overspend and default on your payments.
No intro period. Unlike balance transfer credit cards, debt consolidation loans don’t offer low or 0% interest intro periods.
Potentially higher monthly cost. A loan might get you out of debt faster but repayments are often higher than the monthly minimum on your credit card.
Less flexibility. Your new loan will have a fixed monthly payment instead of a monthly minimum repayment like credit cards.
What are the requirements of a debt consolidation loan?
Requirements vary by lender but you typically need to meet the following criteria:
Criteria
Sample of documents required
Canadian citizen/resident and the age of majority in your province (18 or 19 years old)
Government-issued ID, like a passport or driver’s licence
Meet minimum income requirements
Pay stubs, bank statements, tax returns
Meet minimum credit score requirements
Consent to have your credit score checked and provide your Social Insurance Number in some cases
Active bank account
Direct deposit information
Are there guaranteed consolidation loans in Canada?
No. Steer clear of lenders offering guaranteed consolidation loans in Canada because this could be a scam. Legitimate lenders will first take a look at your finances before approving.
You can increase your chances of getting approved for a debt consolidation loan if you offer collateral or have a guarantor or cosigner, but if you’re facing legitimate financial hardship and struggling to keep up with your debts, you may want to look into debt relief options.
The results of the Finder: Consumer Sentiment Tracker Q3 (CSTQ3) were collected through an online Pollfish survey conducted between August 10 to 21, 2023. In the survey, 1,013 Canadians from across the country were asked about their current debt obligations, among other questions regarding money goals and financial confidence. The estimated margin of error for the survey is +/- 3%, 90% of the time.
The results of the Finder: Consumer Sentiment Survey Q2 (CSTQ2) were collected through an online Pollfish survey conducted between April 27 and April 29, 2023. In the survey, 1,011 Canadians from across the country were asked about their past use and current plans to use personal loans and other forms of credit. The estimated margin of error for the survey is +/- 3%, 19 out of 20 times.
Frequently asked questions about debt consolidation in Canada
Consolidating debt can be a good idea if you get a lower interest rate than what you're currently paying. The best debt consolidation in Canada will help you save money, not just get you an easy-to-manage payment.
It depends on which lender you apply with. Some lenders have strict eligibility criteria that can make it difficult to qualify if you have a low credit score or a low/less traditional form of income. Others are more lenient and will accept bad credit in exchange for higher interest rates. Learn more about debt consolidation loans for bad credit.
Yes, debt consolidation loans are common loan products. You can get a debt consolidation loan from the big banks, such as RBC, BMO and TD. You can also get a debt consolidation from credit unions, such as FirstOntario and Vancity.
Yes and no. When you apply for a debt consolidation loan, your score may go down temporarily when your lender checks your credit. However, the overall effect of debt consolidation should be positive if you make on-time payments and change your spending habits.
You can definitely use your credit card after debt consolidation, but you should be careful to avoid overspending. Keep your credit card balance low to avoid taking on more debt than you can afford.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
A guide to loans for 18-year-olds — or older depending on the age of majority where you live.
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