Should I consolidate my debt?

When debt consolidation works

1. Your blended debt rate is high — credit cards at 19.99%+ consolidated at 12% saves significantly
2. You want one simple payment — managing 4–5 due dates increases missed-payment risk
3. You won't re-spend on the cards you paid off — discipline is the hidden requirement
4. You'll keep the term reasonable — stretching $20K credit card debt over 7 years can cost more even at a lower rate

When it doesn't make sense

• The consolidation rate is higher than your blended current rate
• The longer term inflates total interest beyond your current trajectory
• You'd need to put your home at risk for unsecured debt
• You're a habitual re-spender (the cards will refill)

Comparison of Canadian consolidation options

Real-world math

Before: $20,000 in credit cards at 21% APR, paying $500/mo → 78 months to clear, $19,200 in interest.

After consolidation: $20,000 personal loan at 11.99% over 60 months → $445/mo, $6,700 in interest.

Savings: ~$12,500 and 18 months sooner.