Aussie spending: Why now’s the time to consolidate your debt

By Polly Fleeting ·

Aussie spending has been turbulent in 2020, with the devastating effects of the bushfires into the outbreak of COVID-19.  

In fact, according to Deloitte Access Economics’ latest quarterly Retail Forecasts subscriber report (Q2, 2020), retail spending has been a rollercoaster so far this year. 

The report revealed that after the surge in spending growth in the March quarter, Deloitte predicts that it will contract again by 4.0% in the June quarter. 

“2020 has been a tumultuous year for retailers. We’re not even halfway through, but across the whole sector we expect calendar 2020 to register a record breaking fall in real retail sales,” Deloitte Access Economics partner and Retail Forecasts principal author David Rumbens said.

“But while the average is dire, there may not be many retailers performing at the average – many will fare much worse, while supermarkets, pharmacies and hardware, amongst others, have been experiencing a golden run.”

Retail phases 2020 Deloitte

 Source: ABS Cat 8501.0, Deloitte Economics

It’s no secret that there has been a massive swing in consumers’ ability and willingness to spend. For some it has been a time to cut back and save or pay down debt, while others are splurging more than usual as they shop from home.

“Consumer willingness to spend will likely be buffeted by a number of different factors, meaning that one month’s trading experience may be a terrible guide to how the year as a whole pans out,” Rumbens said.

So, no matter which side of the spender-saver fence you sit on, if you are nestling old or new debt, it may be time for you to bid it farewell with a debt consolidation loan. 

How does a debt consolidation loan work?

A debt consolidation loan is a type of personal loan where you can combine a range of different debts and pay them back under one (and in some instances lower) interest rate. This could include credit card debt, store cards, other personal loans or car loans. 

Essentially, this loan rolls your debts into one so you only have to remember one loan term, one repayment due date, one repayment amount and one interest rate.  

Is a debt consolidation loan right for you? 

It all depends on your debts and your personal circumstances. In some cases, this type of loan could end up not only saving you money but also time and hassle as well. 

Here are some examples of when a debt consolidation loan may be a good idea: 

  • You find having multiple repayment due dates confusing 

  • You have a number of different debts with high interest rates 

  • You are unsure about which debts you should prioritise 

  • The benefits of a debt consolidation loan outweighs the disadvantages (for example, a longer loan term doesn’t end up costing you more than paying off your debts separately). 

Debt consolidation loans 2020 - rates updated daily

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    Special Offer Low Rate Personal Loan

    Fixed, Unsecured, 12 Month Introductory Rate

    interest rate
    comparison rate
    Monthly repayment
    5.40% p.a.
    6.36% p.a.based on $30,000
    over 5 years

    OurMoneyMarket offer competitive low rates on loans up to $75,000, plus free extra repayments and fee-free redraw facility. Winner of Mozo's Experts Choice Unsecured Personal Loan 2021 award.

    Go to site
    Details
  • Featured Product
    placeholder
    Personal Loan

    Variable, Unsecured

    interest rate
    comparison rate
    Monthly repayment
    5.75% p.a.to 25.99% p.a.
    6.47% p.a.to 29.2% p.a.based on $30,000
    over 5 years

    Get a personalised rate quote in just 2 minutes, apply in just 7 minutes. Money transferred to your account the next business day. No exit or early repayment fees. Borrow up to $50,000.

    Go to site
    Details
  • placeholder
    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.49% p.a.to 19.95% p.a.
    6.76% p.a.to 20.26% p.a.based on $30,000
    over 5 years

    Low personalised rates, ideal for borrowers with excellent credit. No monthly account fees, no early payout fees, so you can pay off your loan sooner. Borrow between $5,000 and $63,000. Easy online application, receive a response in minutes and approved funds within 24-48 hours!

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Personal Loan

    Unsecured, Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.49% p.a.to 19.99% p.a.
    5.49% p.a.to 19.99% p.a.based on $30,000
    over 5 years

    Excellent credit score needed to obtain this rate. Enjoy no-fuss personal loans of up to $30,000 with Alex. No hidden early repayment penalties. Terms from 6 months to 5 years. Convenient and fast 100% online approval. Must be over 18 to be eligible. Winner of Mozo's Experts Choice Best New Loan Product award 2021^.

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    No Fee Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 17.95% p.a.
    5.95% p.a.to 17.95% p.a.based on $30,000
    over 5 years

    Pay ZERO fees on loans up to $50,000 with NOW Finance. With no establishment fee, ongoing fees or early payout fee. What’s more, get your guaranteed, tailored interest rate in two minutes with no impact on your credit score! Winner of Mozo's Experts Choice Unsecured Personal Loan 2021 award.

    Go to site
    Details
  • placeholder
    Unsecured Personal Loan

    Excellent Credit, Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 8.99% p.a.
    5.95% p.a.to 12.32% p.a.based on $10,000
    over 3 years

    Be rewarded for your good credit history with low rates. Plus there are no ongoing fees and you can pay off your loan with no early repayment penalties. Simply apply online and get a quote in minutes.

    Go to site
    Details

On the other hand, if you are already on top of your debt repayments, or have almost paid it down in full, a debt consolidation loan may not be worth it. 

Similarly, it’s important to keep in mind that these types of loans are designed to help you pay down your debt. So if a debt consolidation loan is likely to cost you more in interest, it may be a better idea to pay down your debts separately. 

RELATED ARTICLE: Where to get a no interest or low interest loan during COVID-19

Need a place to start looking for a debt consolidation loan? Check out the list below or jump over to our personal loan comparison table.

*WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loans Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.