You take out a new loan to pay off multiple debts (credit cards, lines of credit, etc.), leaving you with a single monthly payment.

✅ Often lower interest rate than credit cards.

✅ Simplifies payments.

⚠️ Requires good credit to qualify.

⚠️ You may pay fees or risk higher rates if your credit isn’t strong.

High-interest credit card debt is moved to a new card with a low (sometimes 0%) introductory interest rate.

✅ Can save money on interest if paid off during promo period.

✅ Keeps all debt in one place.

⚠️ Interest jumps significantly after the intro period.

⚠️ Requires discipline to pay it down quickly.

Uses the equity in your home to consolidate debts into one lower-interest loan.

✅ Lower interest rates compared to unsecured loans.

✅ Larger amounts available.

⚠️ Your home is collateral — if you default, you risk foreclosure.

⚠️ Only an option if you own property with equity.

A non-profit credit counselling agency works with your creditors to consolidate payments, reduce or eliminate interest, and set up a structured repayment plan.

✅ One affordable monthly payment.

✅ Reduces or eliminates interest.

⚠️ May impact your credit during the program.

⚠️ Fees may apply depending on the agency.

Through a Licensed Insolvency Trustee (LIT), you negotiate to repay part of your debt over time, with the rest legally forgiven.

✅ Stops collection calls and wage garnishments.

✅ Reduces total debt owed.

⚠️ Impacts credit for several years.

⚠️ Legal process — requires an LIT

You contact creditors directly to request reduced interest, waived fees, or new payment terms.

✅ Can reduce payments without formal programs.

✅ Less impact on credit if handled well.

⚠️ Not all creditors will agree.

⚠️ Requires strong communication and record-keeping.