Consolidate your debt
Managing multiple debts can be overwhelming, but we’re here to help. We created a resource that includes practical steps, tools and articles to help you understand your options.
What is debt consolidation?
Debt consolidation lets you combine multiple debts into one simple monthly payment, often at a lower interest rate. This means less stress, fewer bills, and more of your money going toward paying down your balance instead of interest. It’s a smarter way to get out of debt faster.
Why choose BMO?
Easy, quick application: Apply for our popular loans and lines of credit through our easy and secure online application. - Great rates and flexible terms: Let’s find the monthly payment structure that works best for you.
- The help you need, every step of the way: Get support online, by phone or in branch.
Pros and cons
Is it the right choice for you?
Debt consolidation can help you lower interest costs, simplify your finances, and stay on track with your goals. Learn how it works and whether it’s the right strategy to reduce stress and save money. Everyone’s debt situation is unique, so start by reviewing your finances and determining what makes sense for you.
To get started, book an appointment and speak to one of our specialists about debt consolidation footnote 1.
Simplify your finances
Having one monthly payment compared to multiple payments can you help stay more financially organized.
Lower your interest & monthly costs
When you consolidate high-interest rate debts into one, you could qualify for a lower interest rate, monthly payment, or both.
Repay your debts faster
With fewer payments to manage and a lower interest rate, more of your money can go toward the principal, helping you pay off what you owe sooner.
Improve your credit score
By staying on top of your payments, you can boost your credit score and strengthen your financial profile.
Considerations:
- You may need to pay upfront costs to get a new loan.
- You’ll likely need good or excellent credit to qualify for lower rates, and longer repayments terms may have higher fees.
- Ensure you're keeping up on your payments during and after the consolidation process to avoid negatively impacting your credit score.
What are your options?
Explore the ways you can consolidate your debt and choose the option that works best for you.
Personal loans footnote 2
Borrow a lump sum at a lower rate. Receive a one-time payment to clear your debt, then make fixed monthly payments.
Home Equity Line of Credit footnote 3
Use the equity in your home to borrow flexibly, and only pay interest on what you use during the draw period. Plus, you can lock in all or a portion of your line to enjoy a fixed rate and payment footnote 4.
Home Equity Loans footnote 3
Access your home’s equity with a one-time lump sum disbursement. Enjoy the certainty of a fixed rate and fixed payments.
Credit card balance transfers
Consolidate your balances by transferring them to one card. Simplify your payments and save on interest.
Simplify your finances with our calculators footnote 5
Take control of your debt and explore smart financial options with our easy-to-use tools.
Our debt consolidation calculator can help you simplify your finances. Calculate your options and take control of your debt today.
Determine your monthly payments and term for a line of credit.
Determine your monthly payments on a home equity loan or line of credit.
Helpful tips and articles
For more tools and tips, visit BMO's Real Financial Progress Hub.
What is a Credit Score?
Let’s dive into the details of how credit scores work and how you can boost that all-important number.
Consolidating debt with a home equity line of credit
Learn how to use a home equity line of credit to consolidate debt.
What is a Home Equity Loan?
Discover everything you need to know about what a HELOAN is and how to use it.
FAQs
When taking out a new debt consolidation loan, it’s possible to experience a minor decrease in your credit score. However, making consistent, on-time loan payments build a strong payment history, which is the biggest factor in improving your credit score as it shows lenders that you’re reliable and responsible. Keeping your old accounts open while not using them can also help keep your credit score from decreasing.
Rebuilding credit after debt consolidation typically takes as little as 6 months, but can vary depending on your circumstances. With steady financial habits, your score can begin to recover within a few months and continue improving.
It depends on what option you choose to consolidate your debt. Some options like balance transfer credit cards might require you to close your old credit card accounts while a personal loan option might not.
The timeline varies as debt consolidation involves taking out a new loan to pay off your existing debts, leaving you with just one monthly payment. If your credit score is not strong enough, the creditor may also ask for a co-signer or collateral to secure the loan.
Debt consolidation combines multiple debts into one loan with a lower interest rate, making payments simpler, but you still repay the full amount. Debt settlement (or relief) negotiates with creditors to reduce what you owe, which can hurt your credit and often involves fees.
There are several ways to pay off debt. Debt consolidation combines multiple balances into one loan with a single monthly payment, often at a lower interest rate. You can also use the Snowball Method by paying off the smallest debts first for quick wins, or the Avalanche Method to pay down high-interest rate debts first to save more over time.
Contact Us
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Come into a branch and let’s talk about your plans — and how we can make them possible.
footnote 1 details Please consult with your financial advisor as to the benefits and drawbacks associated with unsecured debt compared to secured debt and whether consolidation of your debts makes financial sense for you.
footnote 2 details You must have a BMO personal deposit account that has been open for at least six months to be eligible for our BMO Unsecured Personal Loans or Lines of Credit. The six-month limitation is not applicable to our Private Bank customers.
footnote 3 details Relationship Requirement: If the property is not located in the following locations; AZ, CA, CO, FL, ID, IL, IN, IA, KS, MN, MO, NE, NV, NM, ND, OK, OR, SD, UT, WA, WI, WY, and EL Paso County, TX (BMO does not offer Home Equity Products in Texas) to be eligible for our real estate secured lending products, you must be a pre-existing BMO customer for at least six months at the time of application; contact a Banker for details. A BMO customer relationship includes any deposit, retirement, small business, secured and unsecured credit, and investment accounts (BMO Alto accounts are excluded). Not applicable to our Private Bank clients or BMO employees.
footnote 4 details Fixed Rate Lock Option Information
The minimum line of credit withdrawn from a HELOC that can be converted to a fixed rate loan is $2,000 and the maximum that can be converted is 100% of the line amount. The minimum term is 5 years and the maximum loan term is 30 years. 30 year term only available at time of origination. No more than three fixed rate lock options may be open at one time. A $75 fee applies each time you convert a fixed rate lock option after the date of origination. Minimum payment due on a fixed rate lock option includes principal and interest in fixed monthly payments. As the fixed-rate balance is paid down during the draw period, funds are replenished and available for use at the variable rate during the draw period.
footnote 5 details Calculator is provided by Leadfusion Inc., which is not affiliated with BMO. The calculator provides estimates. We do not guarantee their accuracy or applicability to your circumstances. Results depend on many factors, including the assumptions you provide. Leadfusion may have different privacy and security standards than BMO. Visit its website at www.leadfusion.com to review its privacy policy.
Accounts are subject to approval and are provided in the United States by BMO Bank N.A. Member FDIC