Consolidating your debt in canada
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Debt consolidation is helpful to people who can’t make their full monthly payments on time.A debt consolidation loan is a single loan (generally from a financial institution) that allows you to repay your debts to several or all of your creditors at once.You are then left with only one outstanding loan — to the financial institution.Contact several financial institutions before you choose a consolidation loan since the interest rates offered by competing financial institutions may vary.This option may be suitable for debts such as those relating to credit cards, public utilities or other consumer loans.In addition to streamlining your debts into a single payment, a debt consolidation loan may also offer you an interest rate that is lower than that charged by your creditors saving you money in interest charges.
This option can be especially attractive if you have outstanding debts at a relatively high rate of interest (for example, those charged on some retail store cards or credit cards).
However, not all debts can be combined into a consolidation loan — a mortgage cannot be included, for example.
Your financial institution will be able to tell you which of your debts you will be able to pay off with the loan that they grant you.
Take charge of your finances with the CIBC Debt Consolidation Calculator.
This debt calculator can help you create a debt repayment plan.
Credit card debt, utility bills, car loans and other personal loans can be consolidated, but mortgages cannot.