The main routes
- Auto refinance with equity takeout, secured against the vehicle at auto loan rates.
- A consolidation loan from a bank or credit union, unsecured and usually at a higher rate.
- A consumer proposal, which reduces what you owe but carries credit consequences.
- Balance transfer credit cards, which help only if the balance clears before the promotional rate ends.
When an auto refinance makes sense
If your credit card interest is 20 percent and a vehicle secured loan is 9 percent, the saving is obvious. The risk is that you have now pledged the car against consumer debt, so the payment has to be sustainable.
Avoid the traps
- Any company that demands an upfront fee before doing anything.
- Debt settlement offers that promise to cut balances without explaining the credit cost.
- Loans that consolidate a small amount into a very long term.
- Consolidating and then running the cards back up, which doubles the problem.
Save thousands
Save thousands by refinancing your vehicle anywhere in Canada.
Free to apply, no obligation, and no credit check to pre-qualify.
Frequently asked questions
A new loan creates an inquiry. A clean consolidation usually improves your profile within a year by simplifying payments.
Secured options such as an auto refinance are usually more available than unsecured consolidation loans.
If you can service the debt, yes. A proposal cuts the balance but stays on your record for years.