When I am Consolidating Debt Loans, Can I Include Other Consolidated Loans?

Dear Jeff,
I took out two consolidation loans, and I have several high credit cards. Can all of them be considered?

Victoria, British Columbia


This is an interesting question and a situation that people often get into when they’re trying to find debt relief. The short answer is that it depends on the lender(s) whether those two loans can be included in a debt management program. Here’s why…

Enrolling in a Debt Management Program (DMP)

When you enroll in a debt management program, your credit counsellor reviews the debts that you want to consolidate and helps you find a payment that works for your budget. The next step is to contact the issuer of each debt you want to include to negotiate and get their signoff on the program. 

In other words, you can only consolidate debts on a debt management program if the lender agrees. Most credit counselling agencies have existing relationships with credit card issuers and a history of helping clients eliminate those debts effectively. So, the lender gets back what they lent you. As a result, they’re usually willing to sign off on a person’s enrollment in a debt management program.

 Typical Debts in a DMP

  • Credit card debt
  • Unsecured Loans
  • Unsecured Line of credit
  • Auto loans

 If you can get these credit card bills, a personal loan, and other debts in a DMP, it can save you money. Also, you can reduce debt faster, which can ultimately save you money. There’s also the benefit of one monthly debt payment with a low interest rate.

Other Organizations and Rules for Consolidating Loans

You may have loans with a bank or financial institution that may not typically work with a credit counselling agency regarding your debt consolidation. Banks and credit unions may do it, but you can’t know for sure until your agency calls during the negotiation part of the credit counselling process. Even having a bank account with them does not ensure preferential treatment. 

It’s worth trying because the loan holder(s) may agree and allow the loans to be part of the DMP. Combining those debts in one low payment may reduce your credit card payments so you can afford the loan payments individually. Do whatever you can to avoid making the minimum payment.

We’d recommend calling for a confidential debt evaluation with a trained credit counsellor. You don’t have to pay for us to contact your creditors to see if they’ll agree to allow your debts to be in the program. If it works, then you’ve found the solution you need, and if it doesn’t, you didn’t spend anything for checking.

Tips To Avoid Further Debt

If you are looking into consolidating loans that you’ve already consolidated, there’s a bigger problem you must face. While it may be possible to do so, there should be no need for this after your first enrollment.

If you find yourself repeatedly looking for debt relief options, you may not have done the work necessary to remain out of debt. See the below tips to avoid getting deeper into debt:

  1. Acknowledge that this is a serious financial situation and not one to be taken lightly. Ask yourself why you got into this position in the first place, and what thoughts/actions you can adopt in the future.
  2. Consider all the options, such as consumer proposal, bankruptcy, and more. Consolidating loans aren’t the only way out of debt.
  3. Stop using credit cards. You mentioned that you have consolidated loans AND credit debt. Someone should have told to stop using credit while on a program at all costs.
  4. Make a plan to remain out of debt. Without a plan, you’re doomed to repeat history.

Jeffrey Schwartz
Executive Director

Jeffrey Schwartz is the Executive Director of Consolidated Credit Counseling Services of Canada and President of the Credit Association of Greater Toronto (CAGT).