Consolidating debts

Consolidating debts involves a financial institution combining some or all of your loans into one. The advantage is that you only have one payment to make, rather than several. Financial institutions are cautious when faced with a request to consolidate debts, as the problem is often more serious than a desire to combine payments.

Financial institutions that do so assume all the risks that previously were shared among several institutions and sometimes credit card companies. This extra risk alone justifies a higher interest rate than for a personal loan¹. Moreover, the financial institution's advisor must be convinced that the debt cycle is over and done with!

1. For more information about debt consolidation interest rates, please contact your caisse.