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Want to simplify your debts and potentially get debt free faster? A debt consolidation loan combines all of your debts into one personal loan. Start comparing below!
$5,000-$75,000
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.
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Fixed
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.
Read reviews and learn more about NOW Finance personal loans
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Excellent Credit, $5,000 - $75,000
Competitive low rates for borrowers with excellent credit on 1-7 year loans from $5,000 up to $75,000, plus free extra repayments. Winner of Mozo's Experts Choice Excellent Credit Unsecured Personal Loan 2024 and Excellent Credit Secured Personal Loan 2024 awards ^. Min. income of 25k after tax, to apply.
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.
Read reviews and learn more about OurMoneyMarket personal loans
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Fixed
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.
Read reviews and learn more about Harmoney personal loans
Your selected personal loans
Roll multiple debts into one loan to streamline your finances with one set of repayments and one interest rate. Competitive fixed interest rates with no monthly or early repayment fees and flexible repayment options. Easy online application and funding in as little as 24 hours (subject to approval).
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.
Your selected personal loans
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Looking for a suitable personal loan with a fuss-free application process? Get started below to let LoanOptions.ai help you on your journey today.
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A debt consolidation loan is a type of personal loan that allows you to roll several debts such as credit card balances, store cards or other personal loans into one place, so you only have to deal with a single repayment.
Debt consolidation loans can also have the benefit of getting you a lower interest rate than typically seen on other loans, usually making the task of paying off your debts a little easier.
Let’s take a closer look
A debt consolidation loan can be super helpful if you’re trying to pay off multiple debts, but there are a few traps to avoid when consolidating debt so that your debt doesn’t stick around for longer than you’d like.
Let’s take a look at the no-nos!
Thinking of merging other debt into your home loan? Well, think again!
You could end up paying more in interest, since home loans have a far longer timeframe than other debt like credit cards or car loans. This means you would be taking longer to pay off a higher amount of debt.
If you’re not careful, any fees that come with your debt consolidation could blow a dent in your bank account, so make sure you can afford the fees before signing up.
Look out for:
Still itching to spend with your credit card? It’s time to break that habit, as otherwise, you’ll push yourself deeper into debt!
Stick to your budget and if you have extra cash, put it towards additional repayments on your loan - so you can pay it off as quickly as possible and reduce interest costs!
As the name suggests, a debt consolidation loan works by collecting your debts from multiple sources. The goal is to streamline your debt repayments so that they’re easier to manage.
Here’s a typical scenario with three different debts:
1. $20,000 car loan with a 9% p.a. interest rate (over 3 years)
*Total interest paid: $2,896
2. $5,000 credit card balance with a 22% p.a. interest rate ($200 paid per month)
*Total interest paid (over 2 years and 10 months): $1,750
3. $2,000 on your store card with an 18% p.a. interest rate
*Total interest paid (over 1 year): $360
All up, the debt here amounts to $27,000 borrowed plus $5,006 of interest: $32,006 in total.
However, if you rolled the $27,000 worth of debt into one single loan with an 8% p.a. interest rate, your monthly repayments would go down to $846. This would see you pay just $3,459 in interest over 3 years instead.
So with the help of a debt consolidation loan, you’d be looking at $27,000 + $3459, for a total of $30,459.
That’s $1,547 less than in the first scenario.
With the potential cost benefits explained, let’s briefly consider the process.
Work out how much you need to borrow to pay off your combined debts.
Compare personal loans from banks and online lenders.
Apply for the debt consolidation loan.
Use the new funds to pay out the balance remaining on loans, credit cards and other debts. Close those accounts.
Stick to the new repayment schedule for the consolidation loan until the balance is paid in full.
Each Australian banking provider has its own criteria for consolidation loan qualification, so the success of your application will depend on the amount of debt you’re in and your credit history.
Here’s a quick checklist of what your provider will likely need:
Personal identification
Employment status/stability
Verification of income and expenses
Additional info about debts and liabilities
Credit history report.
And, here’s how you can improve your chances of approval:
Pay as many of your existing debts off as you can.
Only request to borrow as much as you need.
Check your credit report, make sure it’s accurate.
Minimise your credit card balance.
Know your budget and ability to meet repayments.
The length of time it takes to organise and consolidate the debt into a single repayment will depend on the lender you’re dealing with. Some personal loan providers will help you with this process, others will leave it up to you.
Keep in mind that 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.
Debt consolidation loans can help, but how do you know they’re right for you?
Let’s go over some instances where this type of personal loan might be suitable for you:
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🔋Pros
🪫Cons
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While one low rate debt consolidation loan could definitely help you kick your debt to the curb, it's important to know how to use it.
Below are the main features to compare.
Secured loans: require you to put up an asset, such as a car or house as security for the loan. In return, the lender will often reward you with a lower interest rate and fees. But keep in mind, if you're unable to keep on top of your repayments, the lender has the right to repossess your assets.
Unsecured loans: do not require the security of an asset as collateral, which is ideal if you're a borrower who doesn't have any assets or is unwilling to take on that risk. But you'll generally 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 personal loan interest rates.
Here's the difference between the two:
Fixed interest rate: with your rate locked in for the life of the loan, you’ll have a clearer view of your budget. But some fixed rate loans may not come with the flexibility of making extra repayments, or if you want to pay out the loan early you might have to pay a break fee.
Variable interest rate: 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 or the lender. This means your budget might need adjusting.
You also need to choose a loan with useful repayment options.
For example:
Extra repayments: If you find yourself with extra money in your pocket, you'll want to make sure the loan you select lets you put some into paying off your debts.
Flexible repayment frequency: This can certainly help. Repay your loan on a fortnightly schedule rather than monthly and you can pay off your loan faster.
Automatic repayments: Make sure you never miss a fortnightly or monthly loan repayment by setting up a direct deposit from your bank account to your debt consolidation loan lender.
The interest rate depends on a number of factors including whether you’re taking out a secured or unsecured loan. A secured loan will usually have a lower rate because you’re putting up an asset as security.
These days, many providers also offer Australian borrowers personalised interest rates depending on their credit history. Usually, the better your credit score, the lower the interest rate will be. This is why many lenders have 'from' rates advertised, which indicates a range of options
Finding the best debt consolidation loan for your needs is going to depend on a few important steps.
Compare several loans before deciding
Make sure you’re happy with the interest rate
Check for hidden fees such as application, ongoing or break costs
Know your credit history. Eliminate your credit cards or other products contributing to debt.
Like any other kind of lending, a debt consolidation loan means borrowing money and this is likely to hurt your credit score - at least initially. However, if you’re on top of repayments, your credit score might improve over time. Paying off lingering debts (and closing old credit accounts if you no longer use them) is usually a positive move for your finances in general.
Every lender will have their own borrowing limits for debt consolidation loans. In addition to the bank or lenders loan products, the amount of money that you’re able to borrow will depend on a number of factors such as your credit history, how much money you earn, how long you've been at a job for and how well you’re set up to handle repayments. While it’s important to borrow enough to consolidate your existing debts, resist borrowing more than you need to.
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.
In Australia, banks and other lenders take into account good and 'bad' behaviour when assessing someone's credit worthiness. This means that if you demonstrate good financial management your credit score will improve over time. If you're looking for ways to improve your credit score, check out our guide.
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 options for consolidating debt.
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Your selected personal loans