White Maple leaf

What’s the Deal with Debt Consolidation?

Have you heard the term “debt consolidation” tossed around? It sounds both intimidating and interesting. A way to simplify your debt and monthly payments? Perfect! But debt consolidation isn’t for everyone, especially if you don’t want to rush into something that isn’t right for your finances.


Luckily for you, we’ve outlined the basics of what a debt consolidation loan is, its pros and cons, and how to tell if it’s a good match for you. So, what’s the deal with debt consolidation? Read on to find out!

What is a debt consolidation loan?

A debt consolidation loan can come in many forms, but the purpose of it remains the same: to streamline your finances by combining your various debts into a single loan. The consolidation process allows you to pay off multiple debts with one new loan or a balance transfer credit card. By consolidating, you won’t have to juggle multiple various payments and you can sometimes qualify for a lower interest rate on the new loan.

How you choose to consolidate is up to you and your lender. You might be able to find a specialized debt consolidation loan, but most people use credit card balance transfers or personal loans for debt consolidation. At Maple Federal Credit Union, we suggest using our personal loan to consolidate your debt or our Maple Visa to transfer your credit card balance from a high-rate card.

Pros & Cons

There are many pros and cons to think about when you consider a debt consolidation loan. Here are just a couple to consider:


  • Pay Off Debt Faster
    • Debt consolidation could help you pay down your debt earlier. If your new loan has a lower interest rate and helps you save money each month, you could pay down your loan faster by making extra payments with the money you saved.
  • Reduce Monthly Payment
    • Often when consolidating multiple debts, not only are you reducing the total interest, but also reducing the total amount of your monthly payment. If your desire is to pay off loans faster, make larger monthly payments to reduce the principal faster and save interest too!


  • Could Increase Interest Rate
    • If your credit score isn’t high enough to qualify for a lower interest rate, then a debt consolidation loan might cause you to pay more in interest over time. Make sure to consult with our team at Maple about what your rate could look like.
  • Doesn’t Solve Underlying Problem
    • A debt consolidation loan can certainly help you organize your finances and make them more manageable, but it won’t solve the financial habits that caused the issue in the first place. If you choose to consolidate debt from things like maxed-out credit cards, make a plan to build better financial habits so you don’t find yourself in deeper debt down the line. If you need help making a plan, reach out to our team by contacting us. You may not know this, but we have seven financial counselors at Maple. All of them are trained to help you create a plan that works for your finances!

Is it a good solution for you?

Debt consolidation isn’t the right solution for everyone, but it can be a very powerful financial tool when used correctly. If you have various forms of debt that are high interest and frustrating to manage, a debt consolidation loan is worth looking into. If you have a credit score high enough to qualify for a lower interest rate on the new loan, a debt consolidation loan is well worth your time. Just make sure you have a plan to improve your financial habits at the same time!

Want an opinion on if a debt consolidation loan is right for you? Reach out to our team, and we’ll help you find the right solution for your unique financial situation, judgment-free.

Contact us today!





Keep It Local

Shopping local is a great way to save a little cash while also supporting local businesses. Because there are fewer hands involved, buying local can often save you some money. You’ll likely save money by purchasing green beans from a produce stand because the farmer doesn’t have to divvy up his profits the way a chain supermarket does. It’s also a great way to improve your local economy. For example, every $100 you spend at a local business, $68 stays in the community. Follow your local news and check Facebook pages in your area to see what area businesses are offering locally made products. We know that holiday shopping can be stressful. You’re paying your regular bills, taking care of your everyday expenses, and planning for holiday shopping on top of that. It can be tempting to open multiple credit cards or store cards, which come with incredibly high-interest rates. Don’t get stuck paying big balances on multiple cards. We have numerous options that can help you fund your holiday shopping without spending more.

You are now leaving Maple Federal Credit Union

Maple Federal Credit Union provides links to web sites of other organizations in order to provide visitors with certain information. A link does not constitute an endorsement of content, viewpoint, policies, products or services of that web site. Once you link to another web site not maintained by Maple Federal Credit Union, you are subject to the terms and conditions of that web site, including but not limited to its privacy policy.

You will be redirected to

Click the link above to continue or CANCEL