Could a personal loan save you from Christmas credit card interest?

Congratulations, you’ve managed to get all of the gifts under the Christmas tree and the fridge is fully stocked, but after a frantic December, are you a little hesitant to take a peek at your credit card statement?

If that is the case, you can take some solace from that fact that you’re not alone. In fact, Aussies are likely to whack about $29 billion worth of Chrissy expenditure on their credit cards throughout December - that’s almost $4,000 per household.

With credit card interest rated as the fourth biggest money drain on Aussie households, the cost of Christmas could continue well into the new year for those unable to pay off their balance in full at the end of the December statement cycle.

RELATED: Personal loans on the up ahead of Christmas

And while taking out another loan might seem like the last thing you want to do, SocietyOne’s Maria Loyez insists that using a personal loan to consolidate your debt is a smart strategy to manage repayments and avoid the pricey purchase rates on a lot of plastics.

“If you have multiple credit cards or loans, this can cost you hundreds or thousands of dollars in interest which could be better used towards your goals,” she said.

“Consolidating your debt into a fixed-term personal loan, with lower interest rates than credit cards, can be a good option to reduce interest and allow you to plan ahead with manageable monthly payments.”

RELATED: Want your own rooftop solar system? A green personal loan could be the answer

If the idea of grouping all of your Christmas debt into one, low-interest loan sounds attractive to you, check out a bunch of popular options below or to find out what your repayments would look like use Mozo’s personal loan repayments calculator.

Popping personal loans - last updated 17 April 2024

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.75% p.a.to 26.95% p.a.
    6.75% p.a.to 26.95% p.a.based on $30,000
    over 5 years

    Borrow up to $50,000 unsecured. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Multi-year winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021, 2022, 2023 & 2024^'

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 6.75% would cost $35,430.23 including fees.

    Compare
    Details
  • Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.76% p.a.to 24.03% p.a.
    6.55% p.a.to 24.98% p.a.based on $30,000
    over 5 years

    Fast, easy and 100% online, this is a low cost loan with no ongoing fees or extra repayment penalties. It's perfect for savvy borrowers with great credit. If you’re over 18 and earn above $30,000, you could qualify (other eligibility criteria may apply).

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 5.76% would cost $35,173.52 including fees.

    Compare
    Details
  • Express Personal Loan

    Secured

    interest rate
    comparison rate
    Monthly repayment
    14.95% p.a.to 27.95% p.a.
    29.30% p.a.to 42.8% p.a.based on $10,000
    over 3 years

    Access fast finance on loans from $5,000 to $25,000 with a Jacaranda Finance Personal Loan. Terms from 24-48 months. Check if you qualify with no impact on your credit score. Enjoy a speedy, online approval.

    Repayment terms from 2 years to 4 years. Representative example: a 3 year $10,000 loan at 14.95% would cost $14,324.71 including fees.

    Compare
    Details
  • Debt Consolidation Loan

    interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 18.99% p.a.
    7.19% p.a.to 19.39% p.a.based on $30,000
    over 5 years

    Competitive fixed rates on loans up to $75,000 depending on your credit score. Zero monthly account keeping fees, no exit fees and no early repayment fees. Make weekly, fortnightly or monthly repayments, over 1 to 7 years managed entirely online, at any time. Fast and easy, 100% online application.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

    Compare
    Details

The pros and cons of personal loan debt consolidation

Pros

  • Typically lower interest rates than on a credit card
  • One, easy-to-manage loan
  • Ability to go with a fixed rate, meaning you know what your repayments will look like for each instalment
  • Unsecured loans available, meaning you won’t have to offer any collateral

Cons

  • Pricey upfront cost to take out the loan
  • Minimum loan term, meaning you’re unable to pay off the balance and close the loan early

* 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 Loan Awards

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