Debt Consolidation: Pros & Cons

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What Are the Advantages of Debt Consolidation?

Debt consolidation can be an effective way to take control of your financial future.

By combining multiple debts into a single manageable payment, you can simplify your finances and reduce the stress of juggling various bills. Depending on the method you choose, you may even benefit from lower interest rates and faster repayment. For many Canadians, it’s a practical step toward becoming debt-free.

Your Path to Simpler Payments Begins Here

Use our Debt Calculator to estimate how much you can save by consolidating your debt. It’s quick and easy.

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Not Sure If Debt Consolidation Is Right for You?

Debt consolidation is one of several ways to take control of your finances — but it’s not the only option.

Depending on your situation, alternatives like a consumer proposal or credit counselling might be a better fit. We know every financial story is unique, which is why understanding all your options is so important. Use our simple comparison page to explore what could work best for you.

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disadvantages

Understanding the Disadvantages of Debt Consolidation

While debt consolidation can offer many benefits, it’s important to weigh the potential drawbacks. Here are some key considerations:

You may still pay interest

Unless you qualify for a low-interest loan or use a consumer proposal, interest charges could still add up.

It won’t reduce your debt unless negotiated

Unless you’re filing a consumer proposal, your total debt usually stays the same.

It may impact your credit

Depending on the method used, your credit score may be temporarily affected.

It requires reliable income

Especially for consolidation loans, lenders will need proof that you can make consistent payments.

Not all debts can be included

For example, secured loans (like mortgages or car loans) may not qualify.

Some options charge upfront fees

Especially with informal debt settlement programs, fees can add up quickly without guarantees of success.

Need help navigating your options?

Book a free consultation with Spergel today, and we will calculate a payment plan for you to get started.

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Considerations

What to Consider When Consolidating Debt

Before committing to a debt consolidation strategy, consider the following:

Do you have a reliable monthly income?
What’s your current credit score?
Are you looking to reduce interest, monthly payments — or both?
Would legal protection from creditors offer peace of mind?

How to Apply

Next Step

How Do I Get Started?

The first and most important step is to speak to a Licensed Insolvency Trustee.

(LITs) Licensed Insolvency Trustees are the only professionals in Canada legally able to file all forms of debt relief. At Spergel, our experienced Licensed Insolvency Trustees offer the following:

Free consultations
As many meetings as you need
A full review of your financial situation and tailored options
Affordable debt relief solutions
A 99% acceptance rate on consumer proposals we file

Everyone’s Situation is Different. Let’s Talk About You.

Book a free call with Spergel today, and we’ll create a plan that’s right for your life.

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Real Canadians. Real Success — Like Chelsey

“I am immensely grateful to the Spergel team for guiding me through a challenging financial crisis with empathy and expertise. From negotiating with my creditors to providing emotional support and financial education, Spergel transformed my situation from imminent bankruptcy to renewed stability. Spergel is not just a service; they are partners committed to empowering individuals through complex financial journeys, and boy, was mine complex.”

– Chelsey B., British Columbia

Read Chelsey’s Story

Chelsey's Story is just one of many

It shows that once you face your debt and get the right help, life can get better – quickly. Discover more Success Stories of Canadians we’ve helped, or reach out to us.

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How We’ve Helped Others

Every debt story is different — and so is every solution. Here’s what real clients had to say about working with Spergel.

How We’ve Helped Canadians Just Like You

Debt can feel isolating — but you’re not alone. From single parents to small business owners, we’ve helped thousands of Canadians find relief and regain control.