A debt consolidation loan combines all of your debts into one personal loan, typically saving you on interest costs. It can also help you manage your repayments more easily and help you to get out of debt sooner. Use our expert tables and compare repayments to find a debt consolidation loan to fit your needs.
Fixed
Terms from 2 to 7 years. Representative example: a 5 year $30,000 loan at 5.95% would cost $34,757.21 including fees.
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^.
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^.
Read our Mozo Review to learn more about the NOW Finance No Fee Unsecured Personal Loan
Excellent Credit
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 6.75% would cost $35,580.23 including fees.
OurMoneyMarket offer competitive low rates on loans up to $50,000, plus free extra repayments and fee-free redraw facility. Winner of Mozo's Experts Choice Unsecured Personal Loan 2021 award^.
OurMoneyMarket offer competitive low rates on loans up to $50,000, plus free extra repayments and fee-free redraw facility. Winner of Mozo's Experts Choice Unsecured Personal Loan 2021 award^.
Read our Mozo Review to learn more about the OurMoneyMarket Low Rate Personal Loan
Variable, Unsecured
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.75% would cost $35,190.18 including fees.
Crush debt with a low rate personal loan from Symple. Apply in just 7 minutes and get the funds available next business day. Flexible loan terms from 1 to 7 years with no exit fees or early repayment penalties. Borrow up to $50,000.
Crush debt with a low rate personal loan from Symple. Apply in just 7 minutes and get the funds available next business day. Flexible loan terms from 1 to 7 years with no exit fees or early repayment penalties. Borrow up to $50,000.
Read our Mozo Review to learn more about the Symple Loans Personal Loan
Excellent Credit, Fixed
Terms from 2 to 3 years. Representative example: a 3 year $10,000 loan at 6.99% would cost $11,114.11 including fees.
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.
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.
Read our Mozo Review to learn more about the SocietyOne Unsecured Personal Loan
Fixed
Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 6.49% would cost $35,405.64 including fees.
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!
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!
Read our Mozo Review to learn more about the Wisr Unsecured Personal Loan
Fixed, Unsecured
Terms from 1 to 7 years. Representative example: a n/a year $0 loan at 8.99% would cost $7,856.30 including fees.
Heritage Bank discounted rates for loans starting from $5,000 to $25,000 and a choice of loan terms up to five years.
Heritage Bank discounted rates for loans starting from $5,000 to $25,000 and a choice of loan terms up to five years.
Read our Mozo Review to learn more about the Heritage Bank Standard Personal Loan
Fixed
Terms from 1 to 5 years. Representative example: a 5 year $30,000 loan at 6.99% would cost $36,208.67 including fees.
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'll likely qualify.
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'll likely qualify.
Read our Mozo Review to learn more about the Harmoney Unsecured Personal Loan
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 6.75% would cost $35,680.23 including fees.
Handypay offer flexible home improvement loans up to $75,000. Handypay is a specialist home improvement plan provider.
Handypay offer flexible home improvement loans up to $75,000. Handypay is a specialist home improvement plan provider.
Read our Mozo Review to learn more about the Handypay Personal Loan
Fixed
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 9.39% would cost $37,881.66 including fees.
No account keeping fees. Apply online and get a fast decision, normally within 24 hours. Winner of Mozo's Experts Choice Award for Australia's Best Large Credit Union 2020^.
No account keeping fees. Apply online and get a fast decision, normally within 24 hours. Winner of Mozo's Experts Choice Award for Australia's Best Large Credit Union 2020^.
Read our Mozo Review to learn more about the CUA Unsecured Personal Loan
Fixed, Unsecured
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 12.69% would cost $41,270.45 including fees.
Get same day approval on flexible personal loans from $5,000 to $55,000 on 1-7 year loan terms with NAB. Enjoy no fees for extra early repayments and get funds in your account fast. To be eligible you must be over 18 and be an Australian resident.
Get same day approval on flexible personal loans from $5,000 to $55,000 on 1-7 year loan terms with NAB. Enjoy no fees for extra early repayments and get funds in your account fast. To be eligible you must be over 18 and be an Australian resident.
Read our Mozo Review to learn more about the NAB Personal Loan
Fixed, Secured
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.99% would cost $35,820.67 including fees.
Offering loans from $3,000 at a fixed rate for the life of the loan. You can check your personal loan interest rate before applying in 3 minutes with no impact to your credit score. Repayments can be made weekly, fortnightly or monthly and extra repayments are accepted.
Offering loans from $3,000 at a fixed rate for the life of the loan. You can check your personal loan interest rate before applying in 3 minutes with no impact to your credit score. Repayments can be made weekly, fortnightly or monthly and extra repayments are accepted.
Read our Mozo Review to learn more about the Latitude Personal Loan
^See information about the Mozo Experts Choice Personal loans Awards
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How much could you save by switching your personal loan? Compare savings from over 200 personal loans. Find out in a few clicks.
A debt consolidation loan is a type of personal loan that allows you to roll a number of different debts, like credit card balances, store cards or even other personal loans, into one place, so you only have to deal with a single repayment.
That means you only have to remember one due date, plus, it can have other benefits like getting you a lower interest rate than on some other products or meaning you only have to pay one annual fee - or no annual fee.
That depends on your personal circumstances of course, but there are plenty of situations when a debt consolidation loan is a good idea, because it could save you a lot of time, money and hassle. For example:
Like any other kind of lending, a debt consolidation loan could hurt your credit score if you aren’t responsible about meeting your repayments. However, if you’re responsible, it doesn’t have to affect your credit negatively.
If you apply for a debt consolidation loan, it will appear on your credit history as an inquiry and if you’re successful, as a new source of credit available to you. This can be good or bad - it lowers your credit utilisation, which is usually a good thing, but it also raises the amount of total credit available to you which isn’t always as positive.
However, in the long run, paying off lingering debts (and closing old credit accounts if you no longer use them) is a good thing, and usually a positive move not only for your credit history, but for your finances in general.
When you've got debt accruing on everything from your car loan to your credit card, a debt consolidation loan can be a helpful banking product, as you can roll over all your varying debt into one easy to manage personal loan.
Apart from the benefit of saying goodbye to multiple payments as you'll only have one monthly repayment, you'll also get the chance to reduce the interest rates you're paying, particularly if you're consolidating high rate credit or store cards into the new loan. This should mean big savings for you in the long run.
Say you have the following debt:
In this scenario, your monthly repayments would be $899 and over 3 years you would pay $5,373 in interest. Whereas if you rolled that $27,000 worth of debt into one single loan with a 8% interest rate, your monthly repayments would go down to $846 and you would pay just $3,459 in interest over 3 years - that's a total saving of $1,914 in interest.
While one low rate loan could definitely help you kick your debt to the curb, it's important to know how to use the product to your advantage, whilst avoiding the traps that could see your debt stick around for longer than you'd like.
Here are the absolute must DOs
1. Workout what type of debt consolidation loan you'll needThere are plenty of choices when choosing a debt consolidation loan but the wrong choice could end up costing you big time. So make sure you take the time to consider your different options when it comes to finding the right loan for you. Start by deciding whether you will sign up with a secured or unsecured loan:
Secured loan: As the name suggests, this personal loan option requires you to put up an asset, such as a car or house as security for the loan and in return the lender will reward you with a lower interest rate and fees, as you're considered less risky. But keep in mind, if you are unable to keep on top of your repayments, the lender has the right to repossess your assets as restitution for any loss they incur.
Unsecured loan: Many debt consolidation loans in Australia are unsecured, meaning no security is needed. Which is perfect if you're a borrower who doesn't have any assets or is unwilling to put your car or home at risk. But you'll generally have to pay a higher interest rate and fees, compared to a secured loan.
You'll also have the option of choosing between a fixed and variable interest rate. Here's the difference between the two:
Fixed interest rate: With your rate locked in for the life of the loan you will be able to make a clear budget, as you will know what your ongoing repayments will be. But when you start your debt consolidation comparison, try to avoid loans that have high break cost fees if you want to pay out the loan early. Also keep in mind a fixed rate loan may not come with the flexibility of making extra repayments.
Variable rate: An alternative option is a variable rate loan, that usually comes with flexible features and a generally lower interest rate and fees, but be mindful the rate could change at any time depending on the market.
2. Look for flexible features
You're making the smart move of rolling your debt over to a consolidation loan but you could make an even smarter move by choosing a loan with features that will help you pay off your debt sooner. How you ask? With these two flexible options:
Extra repayments: Okay your finances may not be looking their best now. But you never know when you'll land that work promotion or end of year bonus. So if you find yourself with extra money in your pocket down the track you'll want to make sure the debt consolidation loan you sign up with gives you the ability to pump it straight into paying off your loan.
Flexible repayment frequency: Did you know that if you choose to repay your loan on a fortnightly schedule, rather than monthly you will pay off an extra month at the end of the year? It's true, let's give you a scenario. Say you repay $500 a month, over a year you will have paid off $6,000 of your loan. Whereas, if you choose the 26 fortnight option, you will pay off $6,500 - bringing you that much closer to blasting your debt for good.
3. Set up automatic repayments
And last but definitely not least, you can make sure you never miss a fortnightly or monthly repayment by setting up a direct deposit from your bank account to your lender.
1. Roll your debt into your home loan
Yep, home loan interest rates are pretty competitive right now, with many sitting under the 5% mark. However, be mindful that merging your different debt into your home loan, could mean you will pay more in interest due to the fact that home loans have a far longer timeframe.
Using the example of a $300,000 home loan with a 5% interest rate, by rolling $20,000 into your mortgage you will end up paying $15,075 in interest on that debt over 25 years. Whereas, if you merge that debt into a consolidation loan over 3 years with a 10% interest rate you will only pay $3,232 in interest. Rolling debt into your home loan will only make financial sense if you keep repayments high so that you crush the debt in the shortest time possible.
2. Forget to check for hidden fees
The interest rate isn't the only thing you should consider when comparing debt consolidation loans, you should also make sure you can afford any fees including:
Application fees: The provider may charge you an upfront fee to cover administration fees and to run a credit check to see the level of risk they are taking on by approving you for the debt consolidation loan.
Ongoing fees: You could also be charged a small monthly fee around $10 but before you think that's less than a tuna sandwich these days, over 5 years that $10 will add up to $600 - think about how many lunches that could buy you.
Break cost fees: The Australian Government may have kicked variable rate exit fees to the curb back in 2011 but if you sign up with a fixed rate consolidation loan you could still feel the bite of a break cost fee. So this is something to watch out for when you begin your debt consolidation loan comparison, if you think you might pay off your fixed rate loan early.
3. Keep on using your credit cards
Once you've found the right debt consolidation loan for you, it's time to say goodbye to that plastic in your pocket because continuing to spend like you did before on a credit card will only push you deeper into debt.
Remember it's not your money you're using, it's the banks. So once you've signed up with a debt consolidation loan, stick to your budget and put any additional cash you have towards extra repayments on your loan.
Also take the time to close your old accounts because what's the point of paying a credit card annual fee or a loan service fee if you aren't using the account anymore? We'd say that's money much better put to use by paying off your new debt consolidation loan.
Now that you're in the know when it comes to the dos and don'ts of debt consolidation, kick off your search by comparing debt consolidation loans in the table above.
If you’re struggling with paying off your debts and managing repayments, there are resources available to help you out. From debt advisors to online help, here are a few places you can turn for help with debt.
Debt is no fun, but you shouldn’t be embarrassed to seek help. Taking steps to fix the problem is much more admirable than sticking your head in the sand!
There are a few options for taking out a debt consolidation loan. While banks may seem like the most obvious choice, credit unions and peer to peer lenders are also perfectly good options for consolidating debt. Each have advantages and disadvantages whether it’s fees, customer service or borrowing limits. Simply check out our debt consolidation table above, to weigh up different providers and find what suits you.
It all depends on your current banking situation, but there are both pros and cons for staying with the same lender when you take out a debt consolidation loan.
| Pros | Cons |
|---|---|
| Convenient | Potentially missing out on better deal from alternate lender (less fees, lower interest) |
| Increased chances of being approved because on long standing relationship | Current lender may not offer you a good deal since you’re already a loyal customer (they don’t feel they need to impress you, so to speak |
Make sure you shop around, compare providers and then talk to your current bank and see who can offer you what you want. Or try Mozo’s Switch & Save Calculator to find out how much you can save if you were to jump ship.
Who you take out your debt consolidation loan with affects how much you can borrow, as different lenders have different borrowing limits, but there are also other factors to consider as well. It depends on your credit history, how much you earn, what your monthly repayment would be and how well you’re set up to handle that. While it’s important to borrow enough to consolidate your existing debts, resist borrowing more than you need to - you don’t want to be making bigger repayments than you are already making.
A debt consolidation loan rolls all your debt, like credit card and card loan debt, into one loan where you make one easy-to-manage monthly repayment. Your provider will indicate what the minimum repayment requirements on your new loan will be. This is the amount you need to pay each month in order to pay off your loan within the loan term. Jump over to our personal loan repayments calculator to see how much your repayments could be at different interest rates and different loan amounts.
While that’s all you need to pay each month, it’s a good idea to look for a loan that allows you to make extra repayments so that you can use any extra cash, like a bonus at work or a cash present, to rid yourself of debt sooner.
If your debt consolidation loan application gets rejected it doesn’t mean you can’t apply again, it’s just best if you wait a little while before you do. Instead of banging down the door of your bank or loan provider and demanding they accept your request, give yourself 3 or 6 months to get everything in order and ultimately lessen your chances of being rejected again.
Go through your credit report to ensure you’re in the best financial position you can be to be approved next time. Focus on meeting your current repayments as often as you can, so you look like a reliable borrower to your potential lender.
You may need to tighten your current budget or even create one if you haven’t already. Budgeting is a really important step that should be the first thing you do when looking to pay down debt. Savings here and there can really count, so cut back on spending, like buying more products that are on sale rather than full price at the supermarket or eating in more often than going out.
It may be tough to cut out some of the luxuries in life, but if you’re serious about getting your debt consolidation loan approved and being in a better financial position down the track you may have to make a few sacrifices, at least for a while.
The interest rate on debt consolidation loans will depend on a number of factors including whether you are taking out a secured or unsecured debt consolidation loan. A secured loan will usually have a lower rate because you are putting up an asset as security.
Yes. Standard fees on debt consolidation loans include an application fee, loan service fee and default fees if you miss a repayment or don’t make the full repayment amount. You may also have to pay an early termination fee if you pay out your loan early.
Each Australian banking provider has its own criteria for consolidation loan qualification so it will depend on the amount of debt you’re in and your credit history. It is unlikely you will qualify for an unsecured loan if you have bad credit history, have been bankrupt in the last 10 years, or you are currently unemployed.
Excellent customer service in all areas. Highly skilled phone staff. Incredibly fast personal loan approval ($48000 towards my new preowned vehicle) for existing customer with a recent homeloan approval. Personal loan interest rates are seriously shabby and can be beaten elsewhere but if you get the (higher) variable option, you can pay it down hell for leather; they are quite flexible with their lending products. And their customer service is exemplary in my opinion. Just choose your products wisely and don't hock yourself to the eyeballs. Very convenient for existing customers. Good for female borrowers, whether working, retired, pensioners etc.
Read full reviewExcellent customer service in all areas. Highly skilled phone staff. Incredibly fast personal loan approval ($48000 towards my new preowned vehicle) for existing customer with a recent homeloan approval. Personal loan interest rates are seriously shabby and can be beaten elsewhere but if you get the (higher) variable option, you can pay it down hell for leather; they are quite flexible with their lending products. And their customer service is exemplary in my opinion. Just choose your products wisely and don't hock yourself to the eyeballs. Very convenient for existing customers. Good for female borrowers, whether working, retired, pensioners etc.
Its a bad joke, hidden fees / deceptive interest rates & sneaky brokerage. A network of lies.
Read full reviewIts a bad joke, hidden fees / deceptive interest rates & sneaky brokerage. A network of lies.
Terrible company to deal with, terrible customer service, not very flexible most certainly not helpful at all. Would not deal with them at all for anything ever again.
Read full reviewTerrible company to deal with, terrible customer service, not very flexible most certainly not helpful at all. Would not deal with them at all for anything ever again.
