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.