How does debt consolidation work in Canada?

Debt consolidation works in Canada by allowing consumers to combine multiple debts into one loan with a lower interest rate. This loan is usually obtained from a bank or a financial institution. The lower interest rate makes it easier for the consumer to pay off the debt because they are paying less in interest charges. Additionally, debt consolidation often extends the repayment period which reduces the monthly payment amount. This helps the consumer to manage their finances better as they only have to pay one debt instead of multiple debts. It's important to note that debt consolidation only addresses the symptoms of debt, not the root cause. Consumers still need to address the underlying issues that led to the accumulation of debt, such as overspending or a lack of financial planning, in order to avoid falling back into debt in the future.