Debt consolidation

Debt Consolidation Loans

Debt consolidation combines several debts, such as credit cards, car loans and personal loans, into one loan with one repayment.

Rolling them into your home loan can lower your monthly repayment because the rate is lower, but spreading short-term debt over a long term can cost more in total unless you pay it off faster.

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How it works

You take out one new loan or increase your home loan, then use it to pay out your other debts. You're left with a single repayment, usually at a lower rate.

Keep your repayments up

You don't want to pay off a $5,000 credit card over 25 or 30 years, because you'll pay more interest that way. Keep making the same total repayments you were making before you consolidated, so the extra goes straight onto your loan and clears the old debts faster. The actual saving depends on your loan amount, rate and repayments.

When it may not help

If spreading debt over 30 years means paying more interest overall
If the old cards stay open and the balances build again
If break fees on existing loans outweigh the saving

Our approach

We show you the monthly saving and the total cost over the life of the loan side by side, then help you set a repayment that clears the consolidated debt within a few years rather than decades.

Frequently asked questions

Is it cheaper to consolidate debt into my home loan?

The monthly repayment is usually lower because home loan rates are lower. But if the debt is repaid over 25 or 30 years instead of a few, you can pay more interest in total. Keep making the higher repayment to come out ahead.

Will consolidating hurt my credit score?

A new application shows on your credit file and may cause a small, temporary dip. Over time, fewer accounts and consistent on-time repayments can help your score.

Can I consolidate if I've missed repayments?

Possibly, though fewer lenders will consider it and rates may be higher. Talk to us early. If you're struggling, the National Debt Helpline (1800 007 007) offers financial counselling at no charge.

Juggling several debts?

We'll show you the monthly saving and the total cost before you decide.

Get in touch

Or call us on (07) 3194 0888