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Debt Relief Options

Debt Consolidation
in Ontario

A consolidation loan can combine several balances into one payment. Compare the rate, fees and total cost before you borrow. Our free review helps you see whether it fits your budget.

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Today: Multiple Debts
Visa$11,40019.99%
Mastercard$8,20022.99%
Line of credit$14,80011.5%
Personal loan$6,60014.9%
↓
Consolidated
~$831/mo
5-year loan example8% APR
One payment · Fixed repayment schedule

Illustration: $41,000 borrowed at 8% APR for 60 monthly payments, excluding fees. Your rate and payment depend on lender approval.

One simple monthly payment
Potentially lower interest costs
Clear payoff timeline
Compare the full borrowing cost

Free Consultation

Book Your Free 30-Minute Consultation

Tell us a little about your situation and we'll be in touch within one business day.

Free Consultation

Book Your Free 30-Minute Consultation

Tell us a little about your situation and we'll be in
touch within one business day.

Confidential · No obligation · No judgment

What It Is

What Is a Debt Consolidation Loan?

Debt consolidation uses a new loan to pay off selected existing debts. You then repay that loan through a single monthly payment. Whether it saves money depends on the new interest rate, fees, repayment term and what happens to your old credit accounts.

You generally need to qualify with a bank, credit union or other lender. A lower monthly payment can still cost more overall if the term is longer, so compare the total amount you would repay.

Consolidation is an informal borrowing option, not a legal filing. If you need budgeting help or a creditor repayment arrangement, read our separate credit counselling guide.

One monthly payment instead of several
May lower interest costs if the new terms are better
Repay 100% of the principal — no creditor losses
A repayment schedule you can compare up front
Compare rates, fees and total repayment
Only the right fit if...
Your income can repay the debt in full over a reasonable time
You mainly need structure and lower interest, not debt forgiveness
If money is too tight to repay in full, a legal option may protect you better — we'll say so.
Two Related, Different Options

Is a Loan Different From Credit Counselling?

Yes. A loan replaces selected debts with new borrowing. Credit counselling reviews your budget and may lead to a voluntary debt management plan. Compare both before choosing.

Credit Counselling

Budget and debt guidance helps you assess repayment options. A credit counselling agency may arrange a voluntary debt management plan (DMP) with creditors; Litvack Group can review whether this option fits during a free consultation.

Full budget & cashflow review
Possible DMP with reduced interest if creditors agree
Money-management guidance
You repay 100% of principal
Best for: manageable debt where you mainly need structure, advice, and lower interest — not legal protection from creditors.

Learn how credit counselling works →

Debt Consolidation Loan

A new loan from a bank, credit union, or other lender pays off selected debts. You then repay one loan at the rate and term you qualify for.

One predictable monthly payment
Savings depend on rate, fees and term
Fixed payoff schedule (typically 3 - 7 years)
Existing creditors paid in full
Best for: good or fair credit and stable income — you can qualify for a meaningfully lower rate than your current debts.
Right Fit?

Is a Consolidation Loan Right for You?

A loan may fit when the following describe your situation. If it does not, we can help you compare other routes.

You have stable income and can afford full repayment over time
Your credit is good or fair enough to qualify for a lower-rate loan
You're juggling several payments and want to simplify
Your debt is mainly credit cards, lines of credit, or personal loans
You want to keep your credit score impact as small as possible
You'd benefit from budgeting and money-management coaching
You want to repay your creditors in full, on better terms
You do not need immediate legal protection from collection action

Not sure which option fits?

In a free consultation we walk through your full situation and recommend the best path — counselling, consolidation, or something else.

Book My Free Consultation →
What's Covered

Debts That Can Typically Be Consolidated

People often use consolidation loans to pay these unsecured consumer debts:

Credit card balances
Unsecured lines of credit
Store financing & cards
Some payday loans
Check with the lender: Loan proceeds may have restrictions, and adding secured, tax, student or support debts can raise different issues. Do not assume any debt can be rolled into a new loan. We can review those debts with you and explain whether a different route fits better.
The Process

How to Compare and Apply for a Consolidation Loan

The path is simple, but the right path depends on your numbers. Our job is to walk you through it honestly — and tell you if a different option would serve you better.

What a Consolidation Loan Does Not Do
Don't legally stop creditor calls
Don't reduce the principal you owe
Don't stop wage garnishments
Guarantee that every debt can be included
Guarantee a lower total cost
Don't release you from all debts
If any of these protections matter for your situation, a consumer proposal or bankruptcy may be the right call. We'll tell you in your free consultation.
1
Free Confidential Consultation
We review your income, expenses, debts, and credit profile. You don't need to come in with a plan — that's our job.
2
Honest Recommendation
If credit counselling or a consolidation loan genuinely fits, we'll tell you. If a consumer proposal would save you more or protect you better, we'll say that too. No upselling.
3
Decide on the Option
Weigh the numbers side by side — credit counselling, consolidation loan, or another route — and choose the one that fits your budget and goals.
4
One Monthly Payment
If a lender approves you and the loan closes, selected old debts are paid off. You then make the scheduled loan payment. Check the full term and total borrowing cost.
5
Avoid Rebuilding Balances
Keep a budget for the new payment and avoid running up paid-off credit accounts again. If you want structured guidance, see our credit counselling guide.
Comparing Your Options

Consolidation vs. Other Debt Options

All three reduce monthly stress, but they're different tools. Here's how they stack up — and why we always go through this with you before recommending anything.

Credit Counselling (DMP)Consolidation LoanConsumer Proposal
What you repay100% of principal, often at reduced interest100% of principal at the new loan rateA portion of unsecured debt Less owed
Interest while repayingReduced (negotiated by counsellor)New loan's rate (often lower than cards)Stops on included debts
Typical timelineUp to 5 years3 — 7 yearsUp to 5 years
Legally binding on creditorsNo — voluntaryNo — depends on lender approvalYes — once accepted
Stops collection callsInformally, if creditors agreeOnly after old debts are paid offYes — by law
Stops wage garnishmentNoNoYes — automatic stay
Covers CRA tax debtNoSometimes, via the new loanYes
Credit report impactR7 rating during planHard inquiry; depends on payment historyR7 rating during proposal
Approval needed fromEach creditor (voluntary)A lenderMajority of unsecured creditors by dollar

Want a side-by-side review of all three?

In one free consultation we work through your numbers and show you, in dollars, what each path would cost.

Book My Free Consultation →
Cost

What Does It Cost?

Our initial consultation is free. We can help you compare the full cost and practical tradeoffs before you choose a debt option.

Credit counselling (DMP): setup and monthly fees vary by agency. Ask for a written estimate and compare total fees with any interest relief creditors agree to provide.

Consolidation loan: the cost is the interest you pay on the new loan. There may be a small origination fee depending on the lender. There is no fee from us for reviewing options.

Consumer proposal (for comparison): the trustee's fee is regulated by federal law and built into your monthly payment — there is no separate fee on top.

Illustrative loan calculation · $40,000 borrowed
Loan principal
$40,000
Consolidation loan · ~9% over 5 yrs
~$830/mo · ~$9,820 interest
To assess possible savings
Compare with your current total repayment
Other options
Review DMP or proposal terms for your circumstances

Illustration assumes 60 equal monthly payments at 9% APR with no loan fees. Actual offers and total costs vary by lender and credit profile.

Credit Impact

What Happens to Your Credit Score?

None of these options leave your credit untouched — but a successful plan you finish is almost always better than years of missed payments.

Consolidation loan: applying may cause a hard inquiry and the new account may appear on your credit report. The effect on your score depends on your credit profile, balances and payment history.

Credit counselling DMP reports as an R7 rating on accounts in the plan, similar to a consumer proposal. It clears two years after the plan completes.

The honest truth: the path that protects your credit best is the one you can actually finish. We'll help you pick that one.

1
During a consolidation loan
A lender may make a hard inquiry. Paying old balances does not necessarily close those accounts. On-time loan payments can help your payment history.
2
During a DMP
R7 rating reported on accounts in the plan, for the duration of the plan.
3
After completion
A DMP record generally clears two years after completion. Other negative information may follow different reporting periods.
4
Long term
A finished plan plus rebuilt habits typically beats years of late payments and rising balances — by a wide margin.
Common Questions
Debt Consolidation Loans

Frequently Asked Questions

Q
How is consolidation different from credit counselling?
A consolidation loan replaces selected debts with new borrowing from a lender. Credit counselling reviews your budget and repayment choices; a counselling agency may arrange a voluntary debt management plan. See our credit counselling page for details.
Q
Will consolidation actually save me money?
Only if the new loan's rate is meaningfully lower than your weighted current rate, and you don't run the old credit cards back up. We'll do that math with you in your consultation — including the loan fees — so you can see the real number.
Q
Does Litvack Group provide consolidation loans?
No — we don't lend money. As a Licensed Insolvency Trustee firm, we give independent advice on every option, including consolidation through banks and credit unions. We're not paid by lenders, so you get an honest comparison rather than a sales pitch.
Q
Can I consolidate CRA tax debt?
Most credit counselling DMPs do not include CRA tax debt. Some lenders will allow CRA debt to be folded into a consolidation loan if you qualify, but this isn't always available. A consumer proposal does cover CRA tax debt directly. We'll review the right path for you in your consultation.
Q
Will my creditors stop calling once I sign up?
A consolidation loan does not legally stop collection calls. Creditors may continue collection activity until their debts are paid or they agree otherwise. A consumer proposal or bankruptcy can create a legal stay for covered debts. Tell us about any calls, lawsuits or garnishments during your consultation.
Q
Do I need good credit to consolidate?
For a traditional bank consolidation loan, generally yes. With fair credit, alternative lenders may approve you — but at higher rates that can wipe out the savings. If your credit is strained, a credit counselling DMP or a consumer proposal often produces better total numbers than a high-rate consolidation loan.
Q
What happens if I miss a payment?
On a consolidation loan, missed payments add fees and damage credit, just like any loan. On a credit counselling DMP, repeated missed payments can cause the plan to fail and creditors to resume their original interest rates. We'll build a payment that's realistic for your actual budget — not the maximum number on paper.

Ready to see how much debt relief is possible?

One conversation puts every option on the table. No pressure, no judgment, and no obligation.

Book My Free Consultation →
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