For 2026, typical consolidation rates vary by credit profile: Excellent (750+): 6-12% unsecured, 4-6% secured; Good (660-749): 10-18%; Fair (600-659): 15-25% [citation:2]. The Bank of Canada’s policy rate is currently at 2.25% [citation:8].

Debt Avalanche: Pay minimums on everything, put extra money toward the debt with the highest interest rate. This saves the most money long-term. Debt Snowball: Pay off the smallest debt first for psychological “quick wins” to stay motivated [citation:9].

Using home equity can offer significantly lower rates (e.g., 6.99% HELOC vs. 19.99% credit cards) [citation:10]. However, it converts unsecured debt to secured debt—your home becomes collateral. Only consider this if you’ve addressed the spending habits that created the debt and are confident in making payments [citation:6][citation:9].

Commonly consolidated debts include: credit cards, personal loans, store cards, lines of credit, and sometimes CRA tax arrears or payday loans [citation:6][citation:10]. Student loans and car loans can sometimes be included, but consider their specific terms first.

Initially, your score may dip slightly due to the hard credit check. However, in the medium term (60-90 days), your score typically improves as you pay down revolving balances (credit utilization drops) and maintain on-time payments [citation:10].

List debts by interest rate (highest to lowest). Pay minimum on all, attack the highest rate first. This minimizes total interest paid and is the most efficient way to become debt-free [citation:9].

List debts by balance (smallest to largest). Pay minimum on all, attack the smallest balance first. The quick win of paying off a debt provides momentum and motivation to continue [citation:9].

With 2026 rates, HELOCs offer rates as low as 6.99% [citation:10]. This can dramatically reduce interest costs compared to 19.99% credit cards. However, your home is at risk if you default. Best used when you have significant equity and stable income [citation:6].

Banks like RBC, TD, Scotiabank, and CIBC offer unsecured consolidation loans from $1,000 to $50,000 with terms up to 5 years. Rates start around 7-9% for excellent credit [citation:2]. Approval typically requires a credit score of 660+.

Use SMART goals: Specific (e.g., “Pay off $5,000 credit card”), Measurable (track monthly), Achievable (realistic payment), Relevant (saves interest), Time-Bound (target date like Dec 2026) [citation:9].