Personal loans for debt consolidation

Learn about and compare debt consolidation loans

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A debt consolidation personal loan can help reduce your interest rate and fees by combining your existing loans and debts into one. Avoid the stress of dealing with multiple rates and fees so you can focus on paying off your debt more quickly.

How does consolidating debt with a personal loan work?

If you have multiple debts, such as a loan and credit card, you can take out a personal loan to cover the money you owe, then simply make repayments on the new loan. If the rate offered on the personal loan is lower than that of your other debts, you will save money through lower repayments.

However, you will need to be aware of any refinancing costs or early payout fees on your other debts, as these will also need to be paid as part of the process.

What debt can I consolidate?

It's possible to consolidate a variety of debts using one of these loans. Common types of debt that are consolidated include the following:

  • Personal loans. This is a common type of debt that is consolidated. You can take out a debt consolidation loan to consolidate two or more separate personal loans, a personal loan and another type of credit, or even refinance a personal loan to one with a lower rate and/or fees.
  • Credit cards. If you have a large outstanding balance on your credit card, you can consider taking out a personal loan to pay it off. This can be an option for when you want to consolidate your credit card as well as another debt, or if you aren't a candidate for a balance transfer.
  • Store and charge cards. Balances can easily increase on store and charge cards as they do on credit cards, making them another type of debt people choose to consolidate.
  • Other credit accounts. Depending on the personal loan you take out, you may also be able to consolidate other types of debt. This can include private loans or debts to utility companies (i.e. electricity, phone, Foxtel). You should check what you can consolidate with the credit provider.

Steps to consolidating your debt with a personal loan

Once you have decided to consolidate your debt, you will need to do the following:

  • Calculate how much you need to borrow to cover your debts. This should include any fees or charges you will have to cover in order to pay off your existing debts early.
  • Research and compare personal loan products to find one that meets your needs.
  • Apply for the personal loan.
  • Use the funds to pay off your other debts, along with any fees or charges.
  • Continue to make repayments on your personal loan until it has been repaid.

If you want to consolidate your debt using another method, such as using a credit card, you can read our comprehensive guide to debt consolidation.

Case study

Gary is a 28-year-old labourer. He currently owes $5,000 on his credit card and still has $3,000 to pay off on the car loan he took out four years ago. He has an interest rate of 19.99% p.a. on his credit card and 9.1% p.a. on his car loan, but is struggling to juggle his repayments.

He has found a personal loan that will let him borrow $8,500 with a rate of 7.7% p.a. He decides to take out the loan and uses the funds to pay off his credit card and car loan, as well as the fees and charges for paying off his loan early.

Instead of having to manage multiple repayments at higher rates, Gary now just makes one repayment at a rate of 7.7% p.a., saving him both time and money.

But I have bad credit, can I still consolidate my debt?

Bad credit can strike at any time. Whether you lose your job or miss a few repayments due to illness, debt consolidation for bad credit borrowers is still possible. If you find that your repayments are spiralling out of control, debt consolidation could be for you. With the help of our guide, you could potentially get your finances back on track.

Consolidating your debt with bad credit

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Rates last updated August 19th, 2019
Fox Symes Debt Solutions Fox Symes Debt Solutions Fox Symes offers a range of debt consolidation options to help you if you're struggling with multiple debts. Enquire now

Debt consolidation loans comparison

What to consider when consolidating debt with a personal loan

  • Affordability. You should confirm that the personal loan you use will be cheaper to pay off than your existing debts. You must also ensure that you will be able to cover the repayments on your new loan to avoid going into further debt.
  • Early repayment costs. Many loans will require you to pay additional fees or charges if you repay the loan early. These will need to be paid if you wish to consolidate your debts under a new loan and should be included in your calculations to ensure debt consolidation is the right choice for you.
  • Legitimacy. Always make sure to check that the lender you wish to use is ASIC-licensed and legally able to operate in Australia.

How to get the most out of debt consolidation

Benefits and drawbacks

  • Simple, single repayment.
  • You can reduce your overall payments and costs.
  • No more phone calls from debt collectors.
  • You may increase your debt if you fail to make repayments.
  • You will need to pay any fees or charges for breaking your existing loans.

Other questions you may have

I'm on Centrelink, can I still apply for debt consolidation?

Centrelink can be classed as genuine income by some lenders and can be used as income to assess your serviceability for a debt consolidation loan. It's important to calculate your repayments and find out if your lender accepts your types of income. If you are on Newstart or Youth Allowance you may need to speak to your creditors and work out a repayment plan.

My current bank offers a debt consolidation loan. Should I just apply with it?

There are some definite advantages to applying with your current bank as it may be more willing to approve you because it has an existing relationship with you and can see all your incomings and outgoings. Then again, it may not be able to offer you the best deal. You may want to compare your options before you apply to see how competitive its products are. Then, talk to your bank before applying to discuss your eligibility.

I have some equity in my home. Should I refinance and consolidate my debts that way?

This may be worth considering if you have a large amount of debt to consolidate or if you believe it is the most cost-effective option. Read our guide to refinancing your home loan to consolidate debt for more information.

Can I consolidate more than one credit card?

If you have more than one credit card from different brands you might be finding it hard to manage your interest repayments. By rolling your existing debts into a new consolidation loan, you could pay less interest and lower your repayments. If you have one credit card with a $6,400 limit at 19.99% p.a., another $1,000 limit at 13.49% p.a. and an "interest-free" store card, these can all be consolidated into a new loan.

What's the difference between debt consolidation and a debt agreement?

A debt consolidation loan is just a standard personal loan product that allows you to consolidate your current debts into one. A debt agreement is something usually taken out by people with large debts and even bad credit history and is a form of bankruptcy. Make sure you find out the terms of the loan you're entering into and the effect it will have on your credit file.

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Personal Loan Offers

Important Information*
Logo for Citi Personal Loan Plus
Citi Personal Loan Plus

You'll receive a variable rate between 8.99% p.a. and 17.99% p.a. (9.67% p.a. to 18.6% p.a. comparison rate) based on your risk profile
A credit limit up to $75,000 that you can continue to draw down over terms up to 5 years. Note: The establishment fee will be waived if you apply before 30 September 2019.

Logo for ING Personal Loan
ING Personal Loan

You'll receive a fixed rate of 8.99% p.a.
Benefit from no ongoing fees, no early repayment fees and flexible loan terms on amounts up to $30,000.

Logo for NOW FINANCE Personal Loans
NOW FINANCE Personal Loans

You'll receive a fixed rate between 8.95% p.a. and 16.95% p.a. based on your risk profile
Apply for loans from $5,000 and get a dedicated loan manager. No security required.

Logo for Westpac Unsecured Personal Loan
Westpac Unsecured Personal Loan

You'll receive a fixed rate of 12.99% p.a.
Benefit from the security of a fixed rate with the flexibility of additional repayments. Existing Westpac customers may qualify for discounts.

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47 Responses

  1. Default Gravatar
    ALLENFebruary 28, 2019

    I have loans that are overdue and outstanding balances to pay. I have the capacity to repay a loan up to $60,000. Where can I find a lender that will consolidate debts that are already overdue and next to being referred to CRAA?

    • Avatarfinder Customer Care
      JeniMarch 2, 2019Staff

      Hi Allen,

      Thank you for getting in touch with Finder.

      On this page you’re looking at, kindly contact the bank/lender you consider applying for a personal loan with to consolidate your debts. Banks/lenders also check your capability to repay the loan so it would be helpful for you to contact your chosen bank/lender directly regarding your loan needs.

      You may use this page as guide on consolidating debt even with bad credit.

      I hope this helps.

      Thank you and have a wonderful day!


  2. Default Gravatar
    NicoleSeptember 7, 2018

    I have been approved for a consolidation loan but the interest is 18% over 5yrs. Short term it will be great to have 1 repayment but over the 5yrs the amount owing is crazy. Can I shop around for a better interest rate? Will it effect me in any way checking?

    • Avatarfinder Customer Care
      JohnSeptember 7, 2018Staff

      Hi Nicole,

      Thank you for leaving a question.

      Yes, this is definitely an options available for you. You may still shop around for better deals but please note that each time you apply hits your credit score since an inquiry is being made. It is best to make sure that you want the deal before you apply for it. This ensures that you make as less inquiries on your credit score as possible. Hope this helps!


  3. Default Gravatar
    NicoleSeptember 7, 2018

    I’ve been offered a debt consolidation loan but the interest is 17%. Do I have to keep applying to find a lender with lower rate? If I do start shopping for a better offer will it effect me in any way checking?

    • Avatarfinder Customer Care
      JohnSeptember 7, 2018Staff

      Hi Nicole,

      Thank you for leaving a question.

      You do not need to keep on applying for a better deal but instead you may ask around on what other lenders could offer. The only time your credit score is when you are already applying for the loan. Speak with lender representatives and see what they could offer, if you do find a better deal then ask what the requirements are and see if you qualify before you apply for the loan. Hope this helps!


  4. Default Gravatar
    JODIEApril 19, 2018

    I have $30,000 to consolidate. Looking for a way to consolidate with a fixed interest rate between 9% – 12%

    • Avatarfinder Customer Care
      NikkiApril 19, 2018Staff

      Hi Jodie,

      Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

      NOW Finance and NAB unsecured loan has a fixed interest rate from 9-12%

      Alternatively, The information above shows you multiple providers for debt consolidation. Enter the amount to be consolidated and click the triangular button beside the INTEREST RATE p.a. to show you the providers within a 9%-12% fixed interest rate.

      Please note that we’re a product comparison website and we hold no affiliation with any company we feature on our site. We provide general information on products to assist you in your buying decision process hence we cannot recommend product / service that is rightfully fit for you.

      Hope this helps! Feel free to message us anytime should you have further questions.


  5. Default Gravatar
    LouiseJanuary 24, 2018

    I need to consolidate some loans and credit cards to the value of $97,000 – my bank only offers up to $50,000 – what do you suggest?

    • Avatarfinder Customer Care
      JonathanFebruary 21, 2018Staff

      Hi Louise, if your bank only offers up to $50,000 it could be better to consider applying for a new balance transfer offer or personal loan offer with a higher credit limit.



  6. Default Gravatar
    ChanelleSeptember 26, 2017

    Please contact me to discuss my current situation.

    Thank you

    • Avatarfinder Customer Care
      JoanneSeptember 26, 2017Staff

      Hi Chanelle,

      Thanks for your enquiry.
      You have reached finder, we are an Australian financial comparison website and general information service. To speak with a representative regarding your concern, you may need to click on the go to site option on this page so you can reach out to your preferred company.


  7. Default Gravatar
    KerrySeptember 3, 2017

    I’m 62 and I need to get a personal loan for debt consolidation. I’m concerned to try as I don’t want to be declined because of my age. Do some banks discriminate based on age even though I am still working full time and will be for quite a few years yet. I do have excellent credit

    • Default Gravatar
      MariaSeptember 3, 2017

      Hey Kerry,

      Thank you for reaching out to us.

      Lenders are not allowed to discriminate based on age but still need to make sure you satisfy the usual lending criteria for personal loans.

      You may check out this page for lenders who consider applications for people nearing or are in retirement:

      As finder is an online comparison service and is not a product issuer, it would be best to get in touch with a lender featured on our page to discuss your eligibility or options.

      Before applying, please ensure that you meet the eligibility criteria and requirements and to read the details, as well as the relevant Product Disclosure Statements/ Terms and Conditions of the option before making a decision and consider whether the product is right for you.

      I hope this helps.


  8. Default Gravatar
    rodJuly 8, 2017

    I want to consolidate 3 cc and 1 personal loan worth around 14000 altogether, i earned 92000 this fin year and these are my only debts.

    • Default Gravatar
      DanielleJuly 9, 2017

      Hi Rod,

      Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.

      You may provide that information on the table above and it will populate options that would fit your needs. You may review and compare the options available on the table. Once you have selected one, you may proceed by clicking the green “Go to Site” button.

      I hope this helps.


  9. Default Gravatar
    AnthonyMarch 21, 2017

    Hi just a quick question if I consolidate my debts into 1 does that allow u to be able to get a new credit card or loan another part of the question for example if I have $20,000 worth of debt and I consolidate for $30,000 what happens to the rest after I’ve consolidated my debt does that become money u can use like a loan or does the consolidation loan only cover ur debt

    Thanks for allowing me to ask these questions

    • Avatarfinder Customer Care
      MayMarch 22, 2017Staff

      Hi Anthony,

      Thank you for your inquiry.

      With debt consolidation, if you meet the eligibility criteria, a lender may only approve you for an amount that you are able to service and repay. They would take all your previous debts into account including your credit card limit, other personal loans, etc. So basically, to help you in managing your debts, they would usually approve an amount that can only cover your debts.

      Furthermore, if you are applying for a higher amount, though, you would need to specify in your application that you would want to use the money to consolidate debts as well as for another purpose. If in case this for a debt agreement, none of this applies as it is already a form of bankruptcy.


    • Default Gravatar
      AnthonyMarch 22, 2017

      Ok so do they add up all the debt

    • Avatarfinder Customer Care
      MayMarch 23, 2017Staff

      Hi Anthony,

      Thanks for getting back.

      Basically, yes. All the debts that you want to consolidate will be taken into account.


  10. Default Gravatar
    JulieJanuary 25, 2017

    I am waiting on my late mothers estate which has been left to my brother and myself 50/50 .It has been cleared from being in probate and now just waiting to be finalized which we have been informed by the lawyers will take about two wks to be cleared. I was on a career’s pension for my mother and since her death i now have applied for unemployment benefits till i get another job. Unfortunately the change over from the career’s payment left a time gap and i wasn’t able to pay certain bills which have to be paid like rent and power etc. I am seeking to apply for loan of $1,000 and will be able to repay the entire loan with in less than a month. Can any lending company help me out please

    • Avatarfinder Customer Care
      DeeJanuary 26, 2017Staff

      Hi Julie,

      Thanks for your question.

      The lenders on this page may consider you for a loan.

      Please click the name of the lender so you’ll see your loan options. Do check also the eligibility criteria to apply before hitting the ‘go to site’ button to submit your application.


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