Finder makes money from featured partners, but editorial opinions are our own.

Debt consolidation loans Australia

Debt consolidation loans can help you save money on fees and interest by rolling multiple loans or credit card balances into one repayment. This could also help you budget and pay off your debt faster.

Avatar

By

Richard Whitten

Edited by

Rebecca Pike

Updated

Fact checked
{"visibility":"visibilityTable","ctaLabel":"Calculate","tableCode":"AUFPL_COMPARISON_V2_TABLE","nicheCode":"AUFPL","fields":[{"name":"LOAN_AMOUNT","value":"20000","options":"","label":"Loan amount","suffix":"$","useSuffixAsPrefix":true,"useDropDownOption":false,"tooltip":""},{"name":"PERIOD","value":"3","options":"","label":"Loan term","suffix":"years","useSuffixAsPrefix":true,"useDropDownOption":false,"tooltip":""}]}
1 - 9 of 108
Updated regularly
Name Interest Rate (p.a.) Comp. Rate (p.a.) Application Fee Monthly Fee Monthly Repayment
OurMoneyMarket Personal Loan
Finder award winnerFixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
6.57%
to 18.99%
Comp. Rate (p.a.)
7.19%
to 21.78%
Application Fee
1.50% - 6%
min. $250
Monthly Fee
$0
Monthly Repayment
$627.42
Go to siteMore Info
NOW Finance No Fee Unsecured Personal Loan
Finder award winnerFixed18 Months - 7 Years $5,000 - $50,000
Interest Rate (p.a.)
6.75%
to 26.95%
Comp. Rate (p.a.)
6.75%
to 26.95%
Application Fee
$0
Monthly Fee
$0
Monthly Repayment
$615.26
Go to siteMore Info
Harmoney Unsecured Personal Loan
Finder award winnerFixed3 - 7 Years $2,000 - $70,000
Interest Rate (p.a.)
5.76%
to 24.03%
Comp. Rate (p.a.)
6.55%
to 24.98%
Application Fee
$275 - $575
Monthly Fee
$0
Monthly Repayment
$623.70
Go to siteMore Info
Latitude Variable Rate Personal Loan
Variable2 - 7 Years $5,000 - $70,000
Interest Rate (p.a.)
9.49%
to 29.99%
Comp. Rate (p.a.)
10.37%
to 30.69%
Application Fee
$0
Monthly Fee
$13
Monthly Repayment
$653.57
Go to siteMore Info
Special Finder offer: $395 establishment fee waived for approved personal loan applications submitted through Finder. Latitude may withdraw offer at any time. T&Cs apply.
NAB Personal Loan Unsecured Fixed
Fixed1 - 7 Years $5,000 - $55,000
Interest Rate (p.a.)
6.99%
to 20.49%
Comp. Rate (p.a.)
8.05%
to 21.49%
Application Fee
$250
Monthly Fee
$10
Monthly Repayment
$635.17
Go to siteMore Info
ING Personal Loan
Finder award winnerFixed2 - 7 Years $5,000 - $60,000
Interest Rate (p.a.)
6.89%
to 18.99%
Comp. Rate (p.a.)
7.10%
to 19.23%
Application Fee
$150
Monthly Fee
$0
Monthly Repayment
$621.16
Go to siteMore Info
Pepper Money No Fee Unsecured Personal Loan
Finder award winnerFixed18 Months - 7 Years $5,000 - $50,000
Interest Rate (p.a.)
6.75%
to 26.95%
Comp. Rate (p.a.)
6.75%
to 26.95%
Application Fee
$0
Monthly Fee
$0
Monthly Repayment
$615.26
Go to siteMore Info
NAB Personal Loan Unsecured Variable Rate
Variable1 - 7 Years $5,000 - $55,000
Interest Rate (p.a.)
6.99%
to 20.49%
Comp. Rate (p.a.)
8.05%
to 21.49%
Application Fee
$250
Monthly Fee
$10
Monthly Repayment
$635.17
Go to siteMore Info
OurMoneyMarket Debt Consolidation Loan
Fixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
6.57%
to 18.99%
Comp. Rate (p.a.)
7.19%
to 21.78%
Application Fee
1.50% - 6%
Monthly Fee
$0
Monthly Repayment
$627.42
Go to site
loading
Showing 9 of 9 results

Read our reviews of other brands

View more

Start comparing

What are debt consolidation loans?

A debt consolidation loan is generally just a personal loan. But instead of taking out money to cover a holiday, car or other purchase, you're using the money to pay off outstanding debts.

The goal with debt consolidation is to combine multiple debts, each with different interest rates and fees, into a single personal loan. Done correctly, you should save money by having a single, more manageable repayment. Not only does this mean more money in your pocket, but also makes budgeting much easier.

You need to make sure the new loan works out to be more cost-effective than keeping your existing debts separate.

What debts can I consolidate with a personal loan?

How to consolidate your debts in 5 simple steps

  1. Take stock of your existing debts. Work out how much you're paying each month in fees and repayments. Count up your total remaining debt amounts so you can work out how much to borrow.
  2. Compare personal loans and find a suitable loan. Look for a new loan with a lower interest rate and minimal fees.
  3. Crunch your costs. Before applying for a new loan, use a loan calculator and make sure the new repayments will be lower than what you're currently paying.
  4. Apply for the new personal loan. During the application make sure you select 'debt consolidation' as the purpose of the loan. This means the lender's assessment team knows that you will be paying off outstanding debts with the loan (these debts will show up in your credit report).
  5. Once approved, pay off your outstanding debts immediately. Make repayments on your new loan until it's paid off.

If you feel overwhelmed by your debt, you're not alone. According to Finder's Consumer Sentiment Tracker, the average Australian has $20,762 in personal debt. This includes car loan, personal loan, buy now pay later and credit card debt. Debt consolidation can make these debts easier to manage. Just make sure your consolidation loan works out cheaper in terms of fees and interest - monthly and over the life of the loan.

Richard Whitten

Richard Whitten
Money editor

Example: consolidating 3 debts into one personal loan

You have 3 debts you wish to consolidate. For the sake of simplicity we're assuming each of these debts has a 3-year term.

Debt typeRemaining debtInterest rateMonthly feesMonthly repayment (inc. fees)
Credit card$3,50020%$10$141
Car loan$9,0007%$12$290
Personal loan$4,00012%$10$143
Total$16,500$574

Over 3 years you would end up paying:

  • $16,500 in remaining debt
  • $3,764 in interest + fees
  • For a total of: $20,264

Now, if you took out a single $16,500 personal loan over 3 years with a $10 monthly fee and an interest rate of 10% you'd have repayments of $543 a month. This means you would end up paying:

  • $16,500 in remaining debt
  • $3,027 in interest + fees
  • For a total of: $19,527

This works out to be $30 a month cheaper and would save you $737 overall.

Tom Goodwin

Debt consolidation can be an extremely useful way to reduce your overall debt (particularly when it comes to interest repayments) while also enabling you to pay it off more quickly. However, it can mean that your credit rating takes a hit -- so if you're thinking about borrowing again in the near future, you'll need to weigh this up as a consideration.
— Tom Goodwin, Commercial Content Editor

Pros and cons of debt consolidation

Pros

  • Save money. By rolling all your debts into one account, you'll be paying one fee and one interest rate. This will likely reduce how much you're paying for fees and interest.
  • Simplify your debts. You will have one monthly repayment to make, one lender to deal with, one set of fees to track and one rate of interest to remember.
  • Could improve your credit score While taking out another loan may temporarily hurt your credit score, by consolidating your debt and then paying off the new loan you could see your credit score improved overall.

Cons

  • Confusing jargon. Watch out for certain "debt consolidation solutions" that are actually a Part 9 Debt Agreement. This is basically a form of bankruptcy and will have long term repercussions on your credit score.
  • High rates for bad credit borrowers. If you have a poor credit score, you're likely to be charged a higher interest rate.
  • Loan exit fees. Depending on how your existing loans are structured, you could have to pay exit fees if you switch loans as part of your debt consolidation

Is a debt consolidation loan the right option for me?

Whether or not a debt consolidation loan is the best option for you will depend entirely on your personal situation, and if you are really struggling you should consider calling the free National Debt Helpline for advice on 1800 007 007.

Generally speaking though, you should consider a debt consolidation loan if:

  • Your credit score has improved since you took out your existing debts
  • You have multiple debts from different lenders and are struggling with the various repayments
  • The lower interest rate on your new loan is enough to cover potential early repayment or break fees from your old loans

Another thing to consider is that, since this is a new loan, your loan term will be reset. This could be a good or a bad thing depending on your goals.

  • If your goal is to reduce your monthly repayments, this new and longer loan term will ease the strain on your day-to-day budget.
  • If your goal is to pay off your debt as soon as possible, the longer loan term could end up costing you more in the long run. However, if your new loan allows free extra repayments then you can use any extra cash to pay your loan off much sooner.

Does debt consolidation hurt my credit score?

In Australia, debt consolidation loans won't necessarily harm your credit score, but as with all credit this depends on a few things.

Any loan can damage your score if you apply for too many different loans at once or miss repayments. But meeting every payment on time and fully paying off your debt can improve your score.

Multiple debts, especially high interest debts, can also affect your score. So consolidating these debts and successfully meeting the payments of your new loan can be an overall benefit to your credit score.

You should also try to take steps to improve your credit score before applying for the loan. And don't apply for multiple loans at once.

Alternatives to debt consolidation

Talk to your lenders about hardship arrangements

If you're really struggling with debts, getting a new loan might only make matters worse. Borrowers in distress should consider talking to their current lenders before they start missing repayments.

Lenders and credit providers offer hardship assistance support for customers. This includes financial counselling, temporary repayment pauses or restructuring of your debts.

Talk to a financial counsellor

If you're struggling with debt and need help you can speak to a counsellor from the National Debt Helpline for free on 1800 007 007.

Refinance your existing debts

Your current lenders and card providers may have similar products with lower rates on offer. Refinancing a personal loan debt could save you money and be a suitable alternative to consolidating your debts.

Balance transfer credit cards

If you have multiple credit card debts you could consolidate them into a single card with a balance transfer credit card. These cards offer a 0% interest period which can help you get your debts under control. This period typically lasts between 12 and 34 months.

But if you don't repay your debt during the 0% interest period you'll be charged a high interest rate.

There are some card providers that even let you transfer personal loan debt to a balance transfer card. But you'll need a good credit score.

Home loan debt consolidation

If you have a home loan and you've been making regular repayments your lender may let you refinance the loan to consolidate other debts.

This might seem like an attractive prospect because your home loan rate will be lower than the rates on other debts. But home loans last for decades. So while it might only add a little to your repayments each month, you could be stretching your debts out for years or decades.

This will cost you a lot more in interest.

Can I get a debt consolidation loan with bad credit?

If you're struggling to manage multiple debts then you may already have a bad credit score. But borrowers with bad credit can still get debt consolidation loans.

Here are some tips:

  • Improve your credit score before applying. A small improvement to your credit score could make all the difference.
  • Get a risk-based personal loan. Many lenders offer risk-based pricing, which just means lower rates for good credit borrowers and higher rates for borrowers with lower scores.
  • Check eligibility requirements before applying. A rejected application harms your credit score, making it even harder to get your next loan approved. Lessen your chance of rejection by checking a lender's eligibility requirements before you apply.
  • Look at specialist bad credit lenders. There are lenders that specialise in lending to borrowers with poor credit histories.

Why compare personal loans with Finder?

free

We're free

Our personal loan comparison is completely free to use. There are no costs at all for you to use our database to find a better deal. Better still, we regularly run exclusive deals that you won't find on any other site.
expert advice

We're experts

We've researched and reviewed hundreds of loans as part of our Finder Awards. Our database and tables are always up-to-date and our in-house experts regularly appear on Sunrise, 7News and SBS News.
independent

We're independent

We are independently owned and have a mission to help Australians make better financial decisions. That means our opinions are our own and you can compare nearly every personal loan in Australia (and find a better deal).
help

We're here to help

Since 2014, we've helped 300,000+ people find a personal loan by explaining your options simply. You don't need to give us any details to use our comparison. We're here to help you make a decision.

Frequently asked questions about debt consolidation loans

More guides on Finder

  • Salt and Lime Debt Consolidation Loan

    Looking to consolidate your debt? Salt and Lime offers fee-free loans, same-day funding, and the ability to earn discounts on your interest over the life of the loan. Apply today.

  • 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.
  • 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.

  • Debt negotiation

    What is debt negotiation and how can it help you? Find out here.

Ask a Question

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our 1. Terms Of Service and 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

47 Responses

    Default Gravatar
    ChanelleSeptember 26, 2017

    Please contact me to discuss my current situation.

    Thank you

    Reply
      AvatarFinder
      JoanneSeptember 26, 2017Finder

      Hi Chanelle,

      Thanks for your enquiry.

      At this time, we do not have a phone line we can use to call you back. We can only assist you here or through chat and/or email. To speak with a representative regarding your debt consolidation, you may need to click on the “Go to site” button of the lender you prefer to be redirected to their website. From there, you’ll be able to find options on how to reach out to them.

      Alternatively, you can utilise the time and the expertise of a professional broker to take the hassle and stress out of finding your options.

      Cheers,
      Joanne

      Reply
    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

    Reply
      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:
      https://www.finder.com.au/personal-loans/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

      Reply
    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.

    Reply
      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.

      Cheers,
      Danielle

      Reply
    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

    Reply
      AvatarFinder
      MayMarch 22, 2017Finder

      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

      Reply
      Default Gravatar
      AnthonyMarch 22, 2017

      Ok so do they add up all the debt

      Reply
      AvatarFinder
      MayMarch 23, 2017Finder

      Hi Anthony,

      Thanks for getting back.

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

      Cheers,
      May

      Reply
    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

    Reply
      AvatarFinder
      DeeJanuary 26, 2017Finder

      Hi Julie,

      Thanks for your question.

      You may consider the list of unemployed loans found on our website to find the right lender for you.

      Please select 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

      Reply
Go to site