Best Debt Consolidation in Canada: Reviews and Guides

If you have way too many credit cards and just want to consolidate them into a single, simple monthly payment, then debt consolidation is what you’re looking for. After all, it’s better to pay off a single loan than a bunch of them, especially when you find a loan with a lower interest rate than what you’re used to paying.

Today we will be looking at the best debt consolidation Canada has to offer – the lenders and platforms for finding loan options. In this article, you’ll find an overview of the best places to search for a loan and information on how to pick the right debt consolidation options at affordable rates. So, let’s start with a short overview.

Best Consolidation Loans in Canada

ReviewMoose appreciates your support. We might earn a commission at no extra cost to you if you buy through the links on our site. Read our full Affiliate Disclosure.

Loans Canada

Best loan directory

  • Wide variety of loans on offer
  • Loans for both good and bad credit
  • Easy loan application
  • Lots of resources available

LoanConnect

Best for smaller loans

  • Pre-approvals in 5 minutes
  • Low rates
  • Streamlined application
  • Loans for both good and bad credit
  • Wide range of loan amounts

Alpine Credits

Best for big loans

  • Direct lender
  • Easy, quick application
  • Loan approval within 24 hours
  • Bad credit customers are welcome

Lendful

Best for good credit borrowers

  • Great transparency
  • 2-minute application
  • Flexible payment options
  • Fair interest rates

Loanz

Best for quick loans

  • Simple loan requirements
  • Quick application processing
  • Great for rebuilding credit
  • No restrictions on loans

Best Debt Consolidation Companies in Canada Reviewed

From the large selection of companies that offer debt consolidation, we’ve chosen the top five to review. In our section, we’ll go into more detail for each one, explaining what kind of loans are offered and what their prerequisites and terms are. Let’s dive deeper, then.

Loans Canada

star 9.2

Best loan directory

  • Interest rate: 2-47.72%
  • Minimum credit score requirement: N/A
  • Term: Up to 60 months
  • Minimum loan amount: $500
  • Maximum loan amount: $50,000
  • Loan type: Unsecured

Loans Canada is the premier destination for finding all kinds of loans from Canadian lenders. No matter if you’re looking for a personal, business, or bad credit loan, you’ll find them all on this website. More than one million Canadians have used Loans Canada so far to secure a loan.

So, what does the first Canadian loan comparison platform offer? For starters, you can browse various unsecured debt consolidation offers. While doing so, keep in mind that this isn’t a lender but a directory of companies that can lend money to you. The site allows you to quickly search and compare offers and, ultimately, find the best possible option to consolidate your debt. You’ll also be able to learn more about debt consolidation, including the whole application process.

Browsing the offer, we’ve observed a wide range of rates and loan amounts at Loan Canada. While each lender changes depending on your credit score, loan amount, and even the province, we can pinpoint what’s being offered here.

The lowest amount you can borrow is $500, while the loans can go as high as $50,000 and can be paid off in up to 60 months. Among the debt consolidation companies that Loan Canada features, rates start at just 2% and go as high as 47.74%. The exact amount, again, depends on the aforementioned factors.

Loan Canada makes it really easy to search and apply for a loan, so it comes as no surprise it’s the first stop for Canadians looking into consolidating their credit card debt.


Pros

  • + Wide variety of loans on offer
  • + Loans for both good and bad credit
  • + Easy loan application
  • + Lots of resources available

Cons

  • Cannot check a lender’s details without starting the loan application

LoanConnect

star 9.1

Best for smaller loans

  • Interest rate: from 6.60%
  • Minimum credit score requirement: 300
  • Term: 6-60 months
  • Minimum loan amount: $300
  • Maximum loan amount: $50,000
  • Loan type: Unsecured

In a lot of cases, applying for a loan is time-consuming. You have to fill out loads of paperwork and provide personal information, only to end up waiting for hours until you get any kind of offer. LoanConnect aims to drastically simplify and speed up that process. In fact, this website will quickly connect you to lenders and loan agents. All you’ve got to do is fill out a simple online debt consolidation form.

At LoanConnect, you can apply for loans that are as low as $300. The company has partnered with a network of lenders to offer great opportunities for Canadians to get cash on fair terms. Similarly to Loan Canada, this site first requires some information to base the search on – citizenship and marital status, annual income, and whether you rent or own your place.

Then, you’ll need to provide rough estimates on your monthly expenses as well as your credit score. After this step, you’ll either get an offer for the desired loan amount, or LoanConnect will direct you to one of the lenders that can work with you to secure a loan.

As for the loans themselves, the amounts vary quite a bit and can go up to $50,000 with a 6-60 month term. The interest rates start at a very fair 6.60%, and as the owners of the site claim, even bad credit consolidation loans can be found here.


Pros

  • + Pre-approvals in 5 minutes
  • + Low rates
  • + Streamlined application
  • + Loans for both good and bad credit
  • + Wide range of loan amounts

Cons

  • Sometimes fails to find any loan offers

Alpine Credits

star 8.5

Best for big loans

  • Interest rate: 10.00-22.99%
  • Minimum credit score requirement: 300
  • Term: Up to 60 months
  • Minimum loan amount: $10,000
  • Maximum loan amount: $500,000
  • Loan type: Secured

So far, we’ve seen a couple of platforms for connecting with lenders. But, what about direct lenders? One of those companies is Alpine Credits, a Surrey-based lender founded in 1969. Throughout the decades, the company has lent more than $1 billion to Canadians and proved to be a convenient alternative to loaning from a bank.

The amount of money you can borrow from Alpine Credits is the highest we’ve seen. In certain cases, this lender will issue loans of up to $500,000. That’s half a million dollars, ten times higher than unsecured debt consolidation loans in Canada. Best of all, you won’t even need to have a stellar credit score, as long as you’re located in one of the Canadian provinces the company operates within. Loans that Alpine Credits offers can be paid off in up to 60 months and the interest rates are in line with those offered by other lenders.

What could be a downside for many potential borrowers is the fact that you have to use your house as collateral. As Alpine Credits accept homeowners exclusively, you should keep in mind that potentially jeopardizing your home down the line is risky, especially in the current precarious economic climate. As such, even though this company offers the best debt consolidation in Canada, it’s not an ideal choice for many.


Pros

  • + Direct lender
  • + Easy, quick application
  • + Loan approval within 24 hours
  • + Bad credit customers are welcome

Cons

  • Only available in the biggest provinces
  • The client’s house is collateral

Lendful

star 9.3

Best for good credit borrowers

  • Interest rate: From 9.90%
  • Minimum credit score requirement: 600
  • Term: 6-60 months
  • Minimum loan amount: $5,000
  • Maximum loan amount: $35,000
  • Loan type: Unsecured

Lendful might just be one of the most transparent lenders in the business. Specializing in personal loans, this company has been in business for more than three decades and offers flexible payment terms. However, there is one caveat – your credit history needs to be almost impeccable.

Applying for a loan at Lendful couldn’t be simpler. It takes just two minutes to complete a single-page form, and within just one business day, the money can be yours. The reason we said this is the best debt consolidation company in Canada is that you know in advance whether you’ll have your loan request approved.

Lendful has a specific set of requirements listed on its website – you need to provide at least three years of credit history and a minimum credit score of 600. If you meet those requirements, chances are you won’t encounter any issues getting the loan.

Another great thing about Lendful is flexibility, specifically in how frequent your payments will be. If you prefer weekly over monthly payments, you can select that option, and you’ll even get some incentives for those payments. Additionally, loan top-ups are available per request. All in all, Lendful has proved to be a great choice for debt consolidation in Canada, of course, as long as you can meet its requirements.


Pros

  • + Great transparency
  • + 2-minute application
  • + Flexible payment options
  • + Fair interest rates

Cons

  • Strict credit history requirements

Loanz

star 9

Best for quick loans

  • Interest rate: 29.9% - 46.9%
  • Minimum credit score requirement: N/A
  • Term: 12-60 months
  • Minimum loan amount: $1,000
  • Maximum loan amount: $15,000
  • Loan type: Unsecured

Loanz is the most recently launched out of all the lending platforms we’ve looked at today. That doesn’t make it less important than others, though. On the contrary, within just a few months of its launch, Loanz provided $250,000 in loans to its customers. So, let’s see what this online lender is all about.

The biggest strength of this company is its website. That is, the way you apply for a loan. The process is quick and simple, and once you’ve verified your phone number, you’ll be one step away from some of the best debt consolidation loans Canada has to offer. Even better, Loanz usually approves the loans within just a few minutes of the application, meaning you’ll get the money on the same day.

Many companies require you to have an outstanding credit score or live in a specific region of Canada, but not Loanz. Pretty much anyone can apply and can get their loan approved. You don’t even need to use the loan for debt consolidation, Loanz won’t enforce this.

That being said, Loanz does have its drawbacks. First of all, your unsecured debt consolidation loan will come with a high interest rate of at least 29.9%. On top of that, the minimum repayment term is 12 months, so this lender is not ideal if you’re looking for a loan that you can repay in just a few months. Aside from those disadvantages, Loanz deserves a recommendation, and it’s obvious why its customer base has consistently been rating it so well.


Pros

  • + Simple loan requirements
  • + Quick application processing
  • + Great for rebuilding credit
  • + No restrictions on loans

Cons

  • High interest rate
  • No short-term loans

How To Obtain the Best Debt Consolidation Loan in Canada

So far, we’ve talked about the lending platforms and lenders that we consider the best choice in Canada. If you wondered how we picked and tested each of them, then this section is for you. We will also explain how you, too, can choose the right lender to get an ideal debt consolidation loan and what to consider when browsing loan offers.

Approval Requirements

When you are applying for a loan, the lender will require you to meet certain thresholds. If you fail to meet them, it is unlikely to approve your loan request. The requirements include but are not limited to your credit score, annual income-to-debt ratio, and whether you have a mortgage on your home.

Application Process

The way you apply for online debt consolidation loans is another deciding factor. Lenders that make this process too long and complex are now losing the race against companies that have streamlined their application forms, reducing them to just one or two pages.

Loan Amounts

A lender is the right option for you if it can provide the loan you’re looking for. Obviously, it’s best to plan how much money you’d like to borrow before you even apply for a loan, so you can narrow down the selection. Most lenders have a limit of $50,000 per loan, but their lower ends differ substantially. You’ll find them offering anywhere between $300 and $5,000 as a starting point.

Payment Terms and Interest Rate

Another deciding factor is how you’ll be paying off your loan. Most lenders require monthly payments, but some offer more flexible options like weekly and bi-weekly payments. Consolidation loans in Canada usually have six-month to five-year repayment terms, in which you’ll have to pay off your loan in full. Flexibility in these terms is what you’re looking for, especially if you’ve already planned out how long you’ll be paying off the debt.

But, you should also take into account the interest rate and any additional fees that come with a debt consolidation loan. This is where it can get quite complicated quickly, and you may end up paying more than you’ve ever planned if you’re not careful with your initial selection. Interest rates are never set in stone. Instead, the lender will state a range and narrow it down based on your credit history and other previously mentioned factors.

On top of that, there could be some loan origination fees, as well as penalties for late payments. While it’s not common for unsecured debt consolidation loans, take extra care if a lender charges prepayment penalties. After all, you shouldn’t get penalized for being a good customer and paying off your debt early.

How Debt Consolidation Works and When To Take a Loan

The primary idea behind debt consolidation is simplification. Say you have three credit cards and a payday loan you’re currently paying off. Each has its own, usually high, interest rate. Not only would you have to manage four different monthly payments, on top of anything else you might have going on in your life, but you also could be losing money due to uneven interest rates. Wouldn’t it be better if you had all of that covered with a single payment?

That’s why credit consolidation in Canada is in high demand. We all lead complicated lives, so we could use some help to make things more efficient. The way it all works is via a loan that’s supposed to cover all your outstanding debt. With one fell swoop, you’ll pay off those credit cards and existing loans, meaning you’ll only have to worry about paying off that single loan until you’re debt-free. Some lenders can even pay your loans for you, while most simply provide you with cash.

What’s more, during the term of your consolidation loan, you’ll have a lower interest rate than all your previous debts combined. This way you’re not paying more than you’re comfortable with and will, ultimately, save money on those repayments. Yes, you might end up paying off that loan for a longer period, but at a way more affordable interest rate.

So, should you take such a loan? And are debt consolidation loans for bad credit a good idea? Obviously, you wouldn’t take out a loan if you’ve only got one or two simple payments to consolidate, especially if the interest on those isn’t particularly high. Remember, you want to simplify things and end up with lower payments overall.

You’ll want a loan that you’re 100% sure you can pay off and not get into even more debt. It’s best to shop around, ask for quotes, and then complete the loan application when you find something that fits into your finances.

Conclusion

Loan consolidation in Canada has been gaining popularity as a service in recent years. Many Canadian companies now offer such a service and so far, it has proved to be one of the most popular loans you can take if you want to simplify all those monthly payments you may have. Whether you have several credit cards or existing loans, consolidation can help you manage all that debt and improve your credit rating.


FAQ

Is consolidating debt a good idea in Canada?

It’s always a good idea to simplify your monthly payments, including paying off debt. Of course, it would be ideal if we could eliminate debt from our lives. But, it helps if we can work with a single loan that we need to pay off instead of multiple smaller ones.

How can I consolidate my debt in Canada?

To consolidate your debt, you need to obtain a single loan to cover all the debt, and then you’ll just need to pay off a single debt. Many lenders offer loans specifically for debt consolidation, and you can learn more about them in this article.

Does consolidating affect your credit rating?

Yes, any loan can impact your credit rating. But, in this case, paying off a consolidation loan can have a positive effect and improve your rating, leading to better terms for future loans.

What is the best option for consolidating debt?

There’s no definitive answer, as consolidation has to be assessed case by case. What’s an inadequate solution for one person could be the best debt consolidation in Canada for another. Generally speaking, debt consolidation should lead to lower and simpler monthly payments. However, exact rates will differ from person to person, depending on their credit history and other factors.

We will be happy to hear your thoughts

Leave a reply

ReviewMoose.ca
Logo