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Personal loans for debt consolidation
This guide will teach you about debt consolidation loans, how to lower your repayments and the best ways to get out of debt.
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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.
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What's in this guide?
Plenti Fixed Rate Personal Loan
Plenti Fixed Rate Personal Loan
From
6.49 %
p.a.
fixed rate
From
6.84 %
p.a.
comparison rate
- Get a personalised comparison rate based on your credit score
100% confidential application
Plenti Fixed Rate Personal Loan
Plenti offers this unsecured personal loan with a fixed or variable rate. Receive a tailored interest rate from 6.49% p.a. based on your risk profile.
- Interest rate from: 6.49% p.a.
- Comparison rate: 6.84% p.a.
- Interest rate type: Fixed
- Application fee: From $149 to $599
- Minimum loan amount: $2,001
- Maximum loan amount: $45,000
Compare debt consolidation loans in Australia
The reality of Australia's household debt
In 2014, the Australian Bureau of Statistics (ABS) commissioned a study titled Australian Social Trends, 2014. The study examined various forms of household debt using data from the ABS National Accounts and the ABS Survey of Income and Housing.
The study revealed interesting trends of how Australians handle their debts.
Why do people struggle with debt?
A look at the numbers above reveals that debt is a part of the majority of Australian households. While some of us continue to struggle with debt, others manage their debts with complete assurance. A different approach and a different mindset make a big difference when it comes to dealing with debt responsibly. How do you deal with your debt? People who struggle with debt typically do the following:
- Do not monitor their income and expenses – this may be due to not knowing how to budget properly or not sticking to their budget
- Have expenses that typically exceed their income
- Are experiencing financial distress brought on by conditions such as a reduced income, being underemployed, etc.
- Engage in certain wasteful habits, such as shopping for things they don't need
- Lack proper money management skills
- Have little or no savings for dealing with unforeseen expenses such as medical emergencies or loss of income
- Don't compare products or review their financial products to see if they could save
- Remain in denial and refuse to acknowledge that they have a debt-related problem on their hands
- Fail to pinpoint the real reasons that got them into debt in the first place
- Make only the minimum payments towards their debts
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.
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
Need help managing your debt consolidation?
Fox Symes Debt Solutions
Fox Symes offers a range of debt consolidation options to help you if you're struggling with multiple debts.Debt consolidation loans comparison
| CUA Fixed Rate Personal Loan | With interest rates starting at 10.99% p.a., you can use this loan to consolidate a number of debts. |
| ANZ Fixed Rate Personal Loan | The ANZ Fixed Rate Loan has rates from 10.50% p.a. to consolidate your debts. |
| MoneyPlace P2P Loan | This peer-to-peer loan comes with rates starting at 7.65% p.a. for debt consolidation. |
| Harmoney Unsecured Personal Loan | An unsecured personal loan that comes with a tailored rate based on you credit history. |
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
- Set a budget to manage repayments.
- Use Finder's financial boot camp.
- Make extra repayments to pay off your debt sooner.
- Look for money hacks/ways to cut down expenditure.
- Compare your options to get the best personal loan for your situation.
What are the pros and cons of debt consolidation loans?
Pros
- Simple, single repayment.
- You can reduce your overall payments and costs.
- No more phone calls from debt collectors.
Cons
- 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.
What other debt consolidation methods are available?
Debt consolidation loans are not the only type of credit available to you if you're struggling with debt. Find the debt consolidation method that is going to work best for your needs and the type of debt you have:
- Balance transfer credit cards. If you have credit card debt across multiple accounts, you can consolidate it into a single card with a balance transfer. You will pay 0% interest for a specific period of time, with some card providers offering up to 24 months. Certain credit card providers also let you balance transfer personal loan debt. For this method, you will also need good credit to be approved.
- Part 9 Debt Agreements. If you're having trouble paying your debt, you could enter into a debt agreement with a third-party organisation and your creditors. The agreement essentially freezes the interest you're paying and gives you a certain repayment period to pay back what you owe. Some creditors agree to accept less than the full balance for repaying your debt, but entering into a debt agreement shouldn't be taken lightly as it is considered a form of bankruptcy.
- Credit counselling. Enlist the services of a reputed credit counselling organisation for formulating a Debt Management Plan (DMP). Once you enrol in a DMP, the creditors will often reduce your interest rates. Afterwards, you will need to make one monthly payment to the counselling organisation. This organisation will handle the repayment to your creditors. This is worthwhile if you can repay your debt within five years, but again, it isn't a decision that should be taken lightly. This should only be entered into if you are having difficulty repaying your debts on your own.
Staying out of debt
When it comes to staying out of debt, there are quite a few things you can do. You could look at developing an emergency fund by trying to save up to 15% of your income. If you find this number a bit high, or just want a way to ease the financial strain, you could consider ways to create alternate sources of income. There are a number of ways to make money online with freelance work by charging people for your skills. You could also consider selling some of your unused items or looking at your expenses and seeing ways you could cut back. As always, creating a budget and sticking to it is a sure-fire way to keep you on track.
Debt reduction strategies you can consider
If you are considering tackling your debt head-on without taking out a debt consolidation loan or other type of credit, there are ways to help you take back control of your finances:
The "snowball" or "domino" method.
This involves you writing down your total outstanding debt on each of your credit accounts, except for your mortgage and HECS-HELP debt. You don't need to consider interest rates at this point. Whichever account has the smallest balance is the account you make additional payments into and you pay off first – then the next smallest balance, then the next smallest, and so on until you are out of debt. This method helps get more accounts closed quickly, saving you interest and fees and gets you motivated by paying off debt. If two accounts have similar rates, pay off the higher interest rate account first. Remember to keep paying the minimum balance on all accounts and to consider early repayment fees for your personal loans.
Pay off your highest balances first
Another strategy is to pay your highest interest balances first. Paying off these accounts will save you money on interest repayments and have the same benefit as the "snowball" strategy in that it will help get your accounts closed. Start by writing down all your accounts, the balance outstanding on each and the interest rate. Remember to consider the balance of credit accounts when starting to pay them down and to keep making minimum repayments on all accounts.
Lose your loyalties
Finding the money to make additional payments can be a struggle. When was the last time you compared your savings accounts? Before making a purchase, have you looked to see if you could find it cheaper with a coupon code? Saving where you can and putting all your additional funds into your prioritised debt (according to the strategy you've adopted) is key to being debt-free.
Budget, budget, budget
Developing and sticking to a budget is of paramount importance when it comes to getting out of debt. There are a number of budgeting websites and tools available that can track your spending, saving and expenses, so see which one works for you.
Other questions you may have
Read more on this topic
-
Part 9 Debt Agreements vs Personal Insolvency (Part 10) Agreement
Find out the difference between Part 9 and Part 10 Debt Agreements (Personal Insolvency Agreements) to decide which one is right to deal with your debt.
-
Part 9 Debt Agreements vs bankruptcy
If you're struggling with debt, these are the differences between Part 9 Debt Agreements and bankruptcy so you can make the right choice for you.
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Insolvency vs bankruptcy
Want to understand the differences between personal insolvency and bankruptcy, and what both of these terms mean for your financial future? Find out here.
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Does bankruptcy actually clear your debts?
Bankruptcy doesn't clear all of your debts – here is a guide to which debts aren't eligible to be covered by bankruptcy.
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What are the consequences of bankruptcy?
This guide will take you through the consequences of bankruptcy so you can decide if it's the right option for you.
-
How should you consolidate debt after Christmas?
Don't let debt weigh you down in 2018! Find out the best way to pay down your personal loan and credit card debt after Christmas.
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Debt solutions
Need a solution for your debt? Find out what options you have in this guide.
-
Debt negotiation
What is debt negotiation and how can it help you? Find out here.
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Misconceptions about debt consolidation explained
This guide will clear up a few of the misconstrued facts surrounding debt consolidation to help you make a better-informed decision.
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What you’re doing wrong that keeps you in debt
It doesn't matter how long you've been in debt or how much debt you have, there are strategies you can use to free yourself from any kind of debt trap. Use our guide to see how you can set yourself on the road to regaining financial control, and getting out of debt once and for all.
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Ask an Expert
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?
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!
Cheers,
Jeni
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 ie.credit checking?
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!
Cheers,
Reggie
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 ie.credit checking?
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!
Cheers,
Reggie
I have $30,000 to consolidate. Looking for a way to consolidate with a fixed interest rate between 9% – 12%
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.
Cheers,
Nikki
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?
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.
Thanks,
Jonathan
Please contact me to discuss my current situation.
Thank you
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.
Cheers,
Joanne
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
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:
https://www.finder.com.au/retired-loans
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.
Cheers!
Maria
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.
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.
Cheers,
Danielle
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
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.
Cheers,
May
Ok so do they add up all the debt
Hi Anthony,
Thanks for getting back.
Basically, yes. All the debts that you want to consolidate will be taken into account.
Cheers,
May
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
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.
Cheers,
Anndy