Debt
Debt Consolidation Calculator
Compare your current high-interest balances to a new mortgage or second mortgage and see whether consolidating actually saves you money.
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What Is Debt Consolidation (And What It Isn’t)
Debt consolidation means combining multiple high-interest debts into one payment, ideally at a lower interest rate.
It is not:
- Taking on new debt without a plan
- Closing credit cards impulsively
- Using consolidation to continue overspending
When structured properly, consolidation simplifies payments, reduces interest, and improves cash flow.
Why January Is the Best Time to Consolidate Debt in Canada
January offers a rare financial reset:
- New budgets and spending habits
- Stable employment verification for lenders
- Motivation to clean up finances early in the year
- A chance to prevent late payments before credit scores drop
Waiting until spring often means higher balances, more interest paid, and more stress.
Will Debt Consolidation Hurt Your Credit?
Short answer: not if it’s done properly.
Debt consolidation can help your credit by:
- Lowering your credit utilization
- Replacing multiple minimum payments with one on-time payment
- Reducing missed or late payments
Credit is usually hurt when people:
- Apply for too many products at once
- Miss payments during the transition
- Consolidate but continue using credit cards
Common Debt Consolidation Options in Canada
1. Personal Loans
Best for smaller balances and strong credit.
2. Lines of Credit or HELOCs
Lower interest, but require discipline to avoid re-borrowing.
3. Mortgage Refinance or Second Mortgage
Ideal for homeowners with equity and high-interest debt.
4. Alternative or Private Lending
Useful when banks say no—especially after holiday overspending or credit dips.
Each option works differently depending on income, credit, and home equity.
How to Know If Debt Consolidation Makes Sense for You
Consolidation is worth exploring if:
- You’re paying mostly interest each month
- You’re juggling 3+ debts
- Cash flow feels tight despite decent income
- You want predictability and simplicity
Before choosing an option, it helps to see the numbers clearly.
Use the Debt Consolidation Calculator to compare your current payments with a consolidated scenario.
The Bottom Line
January debt doesn’t mean financial failure—it means opportunity.
Handled strategically, debt consolidation can:
- Reduce monthly stress
- Improve cash flow
- Protect (or even rebuild) your credit
- Set the tone for a stronger financial year
The key is choosing the right structure, not just the fastest solution.
Next Step
Before making any decisions, run your numbers using the free Debt Consolidation Calculator and see what a smarter January reset could look like.