Consolidation is a new loan that pays off several old ones: a card at 19% RRSO, an online loan at 60%, a cash loan at 13%. Instead of three monthly payments you have one. It sounds simple, but the maths is less obvious than it looks.

The rule of thumb

Calculate the weighted average RRSO of your current debts. If the consolidation RRSO is lower, you win. If it's higher or the same, you lose — no matter how nice the new monthly payment looks.

The trick: the new monthly payment can drop because you've doubled the term. That means you spend 10 years paying off something you'd normally clear in 5. The total cost goes up even at a lower RRSO. Always look at the total cost, not the payment alone.

Side effect: the freed-up credit lines

The cards consolidation paid off still exist, with the full limit available again. If you start using them, you have the original card debt plus the consolidation. This story is common. A practical fix: close the cards once consolidated, or hide them so it takes effort to reach them (literally in the freezer — a method that works).

When consolidation works best

When you have a mix of expensive debt (credit cards, online loans), stable income, a clean BIK and the discipline not to fall back into the old habits. A bank consolidation at 12–14% RRSO then saves real money. In other cases, think twice.

A concrete 2026 example

An example that pulls it together. Kowalski's active debts in June 2026: credit card 8 000 PLN at 19% RRSO (min payment 320 PLN), cash loan 12 000 PLN at 13% RRSO (720 PLN payment, 20 months left), payday loan 3 000 PLN at 45% RRSO (380 PLN payment, 12 months). Combined monthly payments: 1 420 PLN. Weighted average RRSO: about 19%.

Bank consolidation offer: 23 000 PLN over 48 months at 12.5% RRSO. New payment 610 PLN a month. Monthly relief: 810 PLN. But the term is stretched — Kowalski pays longer. Total consolidation cost: about 6 500 PLN in interest. Total cost of current debts on their standard schedules: about 4 200 PLN. Consolidation gives cash-flow relief (810 PLN/month) but costs 2 300 PLN more in total.

When the alternative is better

Instead of consolidation, consider negotiating with the card bank — a drop to 15% RRSO (possible with clean history), aggressive payday overpayment from savings, refinancing the card to a bank with a cheaper card (say, Millennium Prestige at 15.9% RRSO). Those three moves together may be cheaper and faster than a 4-year consolidation.