One payment beats five.
Debt Consolidation Calculator
List your current debts and a new consolidation rate to see your blended interest rate today, your single new payment, and how much interest you'd save each month.
Monthly interest saved
Debt consolidation makes sense when your new rate is meaningfully lower than the blended rate you're paying across your existing debts. Credit cards routinely charge 19.99% or more, so rolling those balances into a secured loan at single-digit rates can save hundreds of dollars in interest every month — money that then goes toward clearing the balance instead of feeding the lender.
A worked example
Imagine you carry $12,000 on a credit card at 19.99%, $8,000 on a line of credit at 9.95%, and a $15,000 car loan at 7.5%. That's $35,000 owing, and the interest alone costs roughly $360 a month. Consolidate all of it into a secured loan at 6.45% and your interest cost drops to about $188 a month — an immediate saving of around $172 every month, before you've paid down a single dollar of principal. Enter your own balances above to see your blended rate and saving.
Where to find the lowest rate
The cheapest consolidation options are usually secured against your home — a mortgage refinance or a HELOC — because they carry the lowest rates available to consumers. Unsecured consolidation loans and balance-transfer offers are faster to set up but cost more. If you go the secured route, weigh any prepayment penalty to break your current mortgage term against the interest you'll save over the life of the loan.
The one rule that makes it work
Consolidation only works if you stop adding new high-interest debt. The most common failure is consolidating, feeling the relief of a lower payment, and then gradually running the credit cards back up — leaving you with the consolidation loan plus fresh balances. Treat the lower payment as a chance to clear the debt faster, not as freed-up room to borrow again.
Frequently asked questions
How does debt consolidation work in Canada?
Debt consolidation combines several high-interest debts — credit cards, unsecured lines of credit, car loans — into a single new loan at a lower rate. Instead of juggling multiple payments and due dates, you make one predictable monthly payment, and you pay less interest overall whenever the new rate is lower than the blended rate across your current debts.
Can I consolidate debt into my mortgage?
Yes. Many Canadians roll high-interest debt into their home through a mortgage refinance or a HELOC, because secured rates are far lower than credit card rates. You can borrow up to 80% of your home's value (less your current mortgage), but breaking your existing term to refinance may trigger a prepayment penalty, so weigh that cost against the interest you'll save.
Does consolidating debt hurt your credit score?
Applying for a new loan causes a small, temporary dip from the credit check. Over time, though, consolidation often improves your score: paying off revolving balances lowers your credit utilization, and a single fixed payment makes it easier to stay current. The score recovers fastest when you avoid running the old cards back up.
Is debt consolidation a good idea?
It's a good idea when the new rate is clearly lower than your blended current rate and you stop adding new debt. It's a poor idea if you consolidate, feel relief, and then re-load your credit cards — that leaves you with the consolidation loan plus fresh balances. Consolidation is a tool to pay debt off faster, not to free up room to borrow more.
What's the difference between consolidating and refinancing?
Refinancing replaces your mortgage with a new, larger one that absorbs the debt — lowest rate, but it resets your term and may carry a penalty. A consolidation loan or line of credit sits alongside your mortgage and is faster to arrange. Both aim for the same result: one lower-rate payment in place of several expensive ones.
Related tools & guides
HELOC Calculator
See how much equity you could draw to pay off high-interest debt.
Refinance Calculator
Compare refinancing your mortgage to consolidate debt at a low rate.
Penalty Calculator
Check the cost of breaking your term before you refinance.
Mortgage Calculator
Model a new mortgage that absorbs your consolidated debt.
Affordability Calculator
See how lower debt payments improve what you can borrow.
Mortgage Glossary
Understand APR, secured debt, and blended rates.
Related guides
Find the Cheapest Way to Consolidate
Compare a HELOC against a full refinance to clear your debt for less.