Help & Tips

Debt Consolidation in Canada – Is a debt consolidation loan the right solution for you?

What are the advantages of a Consolidation Loan?

  • Protect your credit rating for the future
  • Pay less interest
  • Make only one monthly payment
  • Get out of debt sooner

What is Debt Consolidation?

We have collected information from both of the consumer reporting agencies (credit bureaus), as well as our own research to provide a full picture on credit files and credit scores, including those little known “insider” secrets.

Topics at a glance:

  1. What information is kept on my credit file?
  2. How long is information kept on my file?
  3. What is a credit “score”?
  4. How can my credit score affect my life?
  5. What factors affect my credit score?
  6. How do I raise my credit score?

Compare Your Debt Free Solutions

Do you worry that you may be on the road to bankruptcy? If your debts are becoming more than you can handle, there are several options available to help you.

Bankruptcy generally should be considered a last resort, although for some, depending on the circumstances, it may be the only solution.

Let's examine the different debt solutions available to turn your finances around, and help choose which one will work best for you.

What is a payday loan?

A payday loan, or payday advance, is a short-term loan of usually 14 days, which you promise to pay back, plus fees, after you receive your next paycheque. The loan is often between 30-50% of the amount of your paycheque.

To qualify for a payday loan, you must provide proof that you have a regular income, a permanent address and a bank account. You will have to sign a loan agreement which states the loan interest, fees, and due date. Most of the time you will need to provide a post-dated cheque for the full loan amount including all fees and interest, or sign a form for a pre-authorized debit of your account on the loan due date.

How much do payday loans cost?

You can and should order your credit report at least once per year. You can correct any errors, check for identity fraud, and know what your creditors know about you. There are two separate credit reporting agencies in Canada, Equifax Canada and TransUnion Canada, and each may have different information about you in their files, so we recommend you order your credit report from both agencies at least once per year (ordering your own report will not reduce your credit score or affect your report). A good idea is to order from one agency first and the second six months later in order to space your reports out and allow you to detect any problems sooner.

Your credit report is free if you request it by mail, fax, telephone, or in person and receive it by mail or in person. If you prefer to access it quickly online you will have to pay a fee. Your free report will not include your credit score, a 3-digit number that is calculated from your credit activity however, you can purchase your credit score if you prefer. See the credit agency websites for contact information and request your credit report today: TransUnion Canada and Equifax Canada

  At least one of Canada’s Chartered Banks has inserted a provision in their personal banking agreements which reads: "(Bank) may apply for funds in any of your accounts (including joint accounts) against any liability owed to (bank) or its affiliates without prior notice." This provision is perhaps legally questionable, as if one party to a joint account owes money to the bank, and the other party makes deposits to the joint bank account; one would query the right of the bank to in effect attach the funds of one for the debt of another. The ethics of this provision, of course, is a whole other question.

Remember: You have all the control in your debtor negotiations.