How Can I Get All My Debt Into One Payment

Debt Into One Payment

The introduction of various financial tools has made life easier for most Canadians. Credit and debit cards, freely available loans and attractive financial products have boosted consumer spending in the past decade. 

However, there is also a flip side to the coin. With increasing financial accessibility, consumer debt has also increased at a rapid rate. People often find themselves trapped under multiple debts. This not only affects your current financial situation but also stagnates your future growth.

This is where debt consolidation comes into the picture. It essentially means clubbing all your existing debts into a single debt with the aim of securing lower interest rates and achieving better debt management. You can visit the linked site if you are looking for reliable debt consolidation services. 

Problems of multiple debts

If you have multiple debts, there are several risks and issues you’d need to cosnider:

You may miss an installment

With several debts, it becomes difficult to keep track of multiple payments each month. In this case, you can easily forget to make a monthly repayment. Although this might sound like a small error, your credit score can take a hit. If you end up missing 2-3 installments in a year across multiple loans, your credit score could be staring down the barrel.

You can get into recurring debt

Managing your finances becomes a hassle when you have multiple loans. There are chances of you miscalculating your budget and having no funds to make repayments. Once this happens, you may have to seek more loans to pay off previous ones. This is how recurring debt starts, with borrowers making payments just to shift their liability and fend off interest charges.

The repayments you make are first attributed to the interest portion of the debt. Thus, if you have several debts to pay, you’d naturally pay a low installment for each loan (considering that your income is limited). In such a case, the repayments you make do not contribute to reducing the principal amount. Thus, your interest remains the same. With multiple debts, you end up paying more interest, and it can take a long time for your loans to be totally repaid.

How to consolidate your debts?

The motive behind debt consolidation is to get rid of multiple debts and make a single unified payment each month. Now there are several ways this can be achieved, which we’ve outlined below.

Home equity loans

This is by far one of the best ways to consolidate all your debts. In this case, you can borrow a certain percentage of your home’s equity. The equity in your home is calculated after deducting existing mortgages (if any) from the market value of your property. If you do not have any existing mortgages, your home’s equity will be equal to its market value. Most lenders, such as Alpine Credits, a leading provider of home equity loans in BC, offer loans of up to 70-80% of the home’s appraised value. Thus if the value of your home is $2,50,000, you can borrow $ 1,75,000 against it. Now, if you already have a mortgage of $1,00,000, you can still borrow $ 75,000 against your home equity.

Advantages of home equity loan:

  1. Apart from making debt management easy, you can secure a considerably low rate of interest. Since your home secures the loan, the risk assumed by the lender is low. Since the risk is low, the interest rates are also low. Thus, you can use this low-interest loan to pay off all your high-interest debts. After that, you’d just have to make a single low-interest payment every month. 
  2. Home equity loans are not dependent on your credit score. Thus, even if you have a poor credit score, it would not significantly affect your interest rates.

However, since the loan is secured against your home, you risk losing your home if you are not vigilant about your repayments. 

Personal loan

If you do not have home equity to fall back on, you can consider getting a personal loan. However, you must exhibit a good credit score to secure a personal loan at a reasonable rate. 

Similar to a home equity loan, you can use the funds obtained via a personal loan to repay all your existing debts and then make a single unified payment towards this loan.

However, if your credit scores are poor, this might not be the best option for you as your interest rates might be higher than the existing loans. Although this will serve the purpose of consolidating your debt, you will have to make higher interest payments.

Thus, only opt for a personal loan if you have a clean credit history and a good credit score. 

Debt management services

Managing debt might not be the best option for every borrower, and some may simple not understand how they can get started. This is why  it’s a good idea to consider approaching professional debt management agencies. These will usually set you up with a repayment plan where you have to make a single payment every month to your debt management service provider, who, in return, will make the necessary payments to all your lenders. 

Thus, you can shift your debt management burden to a professional. In most cases, these professionals will renegotiate your loan terms with your lenders. In the process, they are, more often than not, able to secure lower payment amounts. However, you will have to pay an additional monthly or yearly fee for using these services. 

In most cases, your overall costs will be lower, but a debt management process can take years and doesn’t do much to reduce the financial burden on you. Still, it can be a good option to consider if you’re out of ideas.


Consolidating your debts is just the first step towards better financial management. It’s important to make sure that you do not fall back on old financial habits that led to the accumulation of multiple debts. Keep your credit usage low and repayments on time. With a year or two of no defaults, your credit scores can also improve, allowing you to bargain from a better position.

Meanwhile, you can also approach reliable debt management companies for help to streamline your financial goals and plans.


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