Home » Loans
Our Disclosure

The content on this website includes links to our partners and we may receive compensation when you sign up, at no cost to you. This may impact which products or services we write about and where and how they appear on the site. It does not affect the objectivity of our evaluations or reviews. Read our disclosure.

Best Debt Consolidation Loans in Canada in 2024


Fact Checked

Looking for a debt consolidation loan in Canada to combine your debts into one single monthly payment? This post is for you.

A good debt consolidation strategy can lower your stress levels and get you back on the path to financial freedom by helping you:

  • Save money on interest fees
  • Pay off your debt faster

Below, I cover how debt consolidation loans work, bank and online lending solutions you can try, debt consolidation loan alternatives, and more.

Best Debt Consolidation Loans in Canada

Here are some of the best debt consolidation loans in Canada.

Loans Canada

Loans Canada is a loan comparison platform for all kinds of personal loans, car loans, debt consolidation loans, and bad credit loans. It has partnerships with some of Canada’s largest lenders and offers free access to your Equifax credit score.

Interest rate: 2.99% to 46.96%.

Loan term: 4-60 months.

Maximum loan amount: Up to $50,000.


LoanConnect is a search engine for finding personal loans online from various lenders. You can use it to find a loan that works for your situation regardless of your credit score.

Interest rate: 6.99% to 46.9%.

Loan term: 3-120 months.

Maximum loan amount: Up to $50,000.

What is a Debt Consolidation Loan?

A debt consolidation loan is a personal loan you can use to pay off your outstanding debt.

This is how it works:

  1. You apply for a debt consolidation loan from a bank, credit union, or online lender.
  2. Use the loan to pay off your existing high-interest debt, such as credit cards, personal loans, payday loans, and other unsecured loans.
  3. Pay off the debt consolidation loan with fixed monthly repayments.

Best Debt Consolidation Loan Providers in Canada

LenderInterest RateAmountTerm
LoanCanada2.99% – 46.96%$500 – $35,0004-60 months
LoanConnect8.99% – 46.96%$500 – $500,0006-60 months
Loanz29.9% – 46.9%$1,000 – $15,00012-60 months

If you have a fair to very good credit score, a debt consolidation loan from a bank like CIBC, Scotiabank, BMO, TD, or your credit union is a great place to start.

While banks may require collateral to approve your loan, their rates and fees are often lower.

If you have bad credit or can’t provide security (e.g. a home), your loan application may not be approved by a bank.

In this case, an online debt consolidation loan from an alternative lender may be your best bet.

Loans Canada

Established in 2012, Loan Canada was Canada’s first loan comparison service.

The platform provides a portal for borrowers to compare and apply for various loans for various purposes, including debt consolidation, car repair, bad credit, consumer proposal payoff, and guarantor loans.

To get started, visit their website to submit your application.

Loan Canada matches your application with a lender that suits your needs and offers you a quote.

If the rates and terms are acceptable, you can finalize your application, submit the necessary documentation, and receive funding.

  • Interest rate: 2.99% – 46.96%
  • Loan amount: $500 – $35,000
  • Loan term: 4-60 months


LoanConnect is an online search engine for finding personal loan rates in Canada.

The company was established in 2016, and it connects lenders with top lending institutions, including banks.

Loans available via the LoanConnect platform include debt consolidation, bad credit, personal, auto financing, and cash loans.

To get started, visit their website to submit an online application.

A pre-approval is usually available within minutes, and you can get the funds within 1-2 business days.

  • Interest rate: 8.99% – 46.96%
  • Loan amount: $500 – $50,000
  • Loan term: 6-60 months


Loanz is a loan comparison platform based in Canada. It is owned by Consumer Genius Inc., a consumer acquisition company that also operates LendingArch and Cars Fast.

To get started, complete the online application form, and Loanz will pair you up with a loan package that meets your needs.

The minimum requirements are:

  • Live in BC, AB, SK, MB, ON, NL, NS, NB, or PEI
  • Have a minimum income of $1,200 per month
  • Not have filed for bankruptcy
  • Be of legal age (18 or 19 years, depending on your province)

You can receive funding within 1-2 business days.

  • Interest rate: 29.9% to 46.9%
  • Loan amount: $1,000 – $15,000
  • Loan term: 12-60 months

Spring Financial

Spring Financial offers several credit products, including personal loans you can use for debt consolidation.

You can apply for this loan via the company’s online platform and borrow up to $15,000. Funds are sent via Interac e-Transfer to your bank account.

To qualify for a loan, you need a minimum annual income of $28,000 and must be at least 21 years old. The company operates in all provinces except Saskatchewan, Quebec, and New Brunswick.

  • Interest rate: Up to 46.9%
  • Loan amount: Up to $15,000
  • Loan term: 9-60 months

How To Apply For a Debt Consolidation

Before applying for a debt consolidation loan, you should consider the following:

Credit score: If you don’t know what your credit score is, find out here. A good to excellent credit rating can help you obtain loans at competitive rates.

If your credit score is below 650, your chances of getting approved by a bank are slim.

Income: Lenders want to see that you are employed and have income sources that are sufficient to cover your monthly debt repayments. Your paystubs or a letter of employment are required during the application process.

Expect lenders to also look at your debt-to-income ratio.

Budgeting: Make a plan to pay off your debt consolidation loan as fast as possible by revamping your budget. If you cannot make your scheduled payments, a debt consolidation loan will not solve your debt problem.

If debt consolidation looks like a good idea, visit your bank or one of the online loan lenders above to submit your application.

Before finalizing your loan application, ensure you understand the rate, fees, and terms of your contract.

Advantages of a Debt Consolidation Loan

After paying off all other debts, you are left with making one monthly payment which is less of a hassle.

Ideally, a debt consolidation loan should have a lower interest rate than the average interest rate you were paying. This results in lower interest costs over time and more money in your pocket.

When you pay off your debt consistently at a lower interest rate, you can pay it off faster.

Disadvantages of a Debt Consolidation Loan

Unless you have a decent credit score, you may find it challenging to get a debt consolidation loan at a competitive rate.

The snowball effect of a bad credit rating could mean that lenders want you to provide collateral. Without acceptable security/collateral, your loan application may be denied or approved at higher interest rates.

Bad financial habits may still derail your debt repayment plan if you do not pay off your consolidation loan as planned.

Lastly, some debt consolidation loan lenders charge expensive origination fees.

Alternatives to Debt Consolidation Loans

You can also pay off debt and cut interest costs using the following strategies.

Balance Transfer Credit Cards

A balance transfer credit card moves your high-interest credit card debt from one card onto another credit card at a lower or 0% interest rate.

This lower rate is usually available for a specific period of time, e.g. 6 months to 1 year.

When the balance transfer promotional period ends, the interest rate increases but may still be lower than what you were previously paying.

Balance transfer credit cards in Canada include:

Note that balance transfer credit cards may charge a transfer fee of up to 3% of the amount being transferred.

Home Equity Loan

A home equity loan or line of credit makes it possible to borrow against the equity in your home.

You effectively use your home as collateral to get a secured personal loan.

Debt Consolidation Program

You can work with a non-profit credit counselling organization to set up a debt management plan to pay off your debt.

This may include negotiating with your creditors to allow monthly repayments that fit your budget.

A credit counsellor can also advise you on other approaches to relieving your debt burden, including filing a consumer proposal or declining bankruptcy.

Debt Consolidation in Canada FAQs

Will debt consolidation damage my credit score?

When you apply for a new loan, your credit score is impacted negatively in the short term. If you pay off your debt consolidation loan consistently, it can help you rebuild or increase your credit score.

How can I consolidate my debt in Canada?

You can use a debt consolidation loan, home equity loan, line of credit, or balance transfer credit card to consolidate your debts in one place.

When is debt consolidation a bad idea?

Debt consolidation does not work if you cannot make the new monthly payments for the loan.

What are the risks of debt consolidation?

If you don’t pay off your debt consolidation loan on time, you could damage your credit score and incur larger debt and interest costs.


Top Loan Offers this month

Compare the best loans for good and bad credit in Canada

Get the best loan rates from lenders regardless of credit score.

Quick online application from the comfort of your home.

Borrow up to $50,000 for 3 months to 60 months.

Loans for any reason with rates from 2.99% to 46.96%.

Check your credit score for free online in 3 minutes or less

Get access to your Transunion credit score for free.

It takes only a few minutes online, and no credit card is required.

Access free identity monitoring and protection.

Includes your credit report updated monthly.


Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu, personal finance expert, author, and founder of Savvy New Canadians, has written about money matters for over 10 years. Enoch has an MSc (Econ) degree in Finance and Investment Management from the University of Aberdeen Business School and has completed the Canadian Securities Course. His expertise has been highlighted in major publications like Forbes, Globe and Mail, Business Insider, CBC News, Toronto Star, Financial Post, CTV News, TD Direct Investing, Canadian Securities Exchange, and many others. Enoch is passionate about helping others win with their finances and recently created a practical investing course for beginners. You can read his full author bio.

About Savvy New Canadians

Savvy New Canadians is one of Canada's top personal finance platforms. Millions of Canadians use our site each year to learn how to save for retirement, invest smartly, maximize rewards, and earn extra cash. We have been featured in prominent finance media, including Forbes, Globe and Mail, Business Insider, CBC, MSN, Wealthsimple, and TD Direct Investing. Learn more about Savvy New Canadians.

Free financial education

Expert advice

Free resources

Detailed guides

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Learn how to master your money
Millions of Canadians visit annually to read our latest personal finance tips. Subscribe to receive our bi-weekly newsletter and free eBooks.
We hate SPAM as much as you do. You can always unsubscribe...
Learn how to master your money

Millions of Canadians visit annually to read our latest personal finance tips.

Subscribe to receive our bi-weekly newsletter and free eBooks.

We hate SPAM as much as you do. You can always unsubscribe...
Please click the link in your email to complete your subscription and download your free ebooks!
Please click the link in your email to complete your subscription and download your free ebooks!