A debt consolidation loan is a sum of money lent by a new creditor to pay off a borrower’s existing creditors. This loan merges all other loans into one easy payment, often with a lower interest rate than the otherwise high-interest loans the borrower starts with.
A debt consolidation program isn’t a loan with a new creditor. Instead, it’s a negotiation with your existing creditors through an agency like Credit Canada to limit your repayment responsibilities to an amount that works better for your finances.
Debt consolidation loans result in creditors being paid back, while programs might see creditors only getting back their principal, not all interest.