Best Debt Consolidation Loans Australia in 2024

1 - 6 of 95

Name	Interest Rate (p.a.)	Comp. Rate (p.a.)	Application Fee	Monthly Fee	Monthly Repayment
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 site More Info Compare
OurMoneyMarket Unsecured Low-Rate Personal Loan ($5,000-$75,000) Finder award winnerFixed1 - 7 Years $5,000 - $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 site More Info Compare
Revolut Unsecured Personal Loan Fixed1 - 7 Years $5,000 - $50,000	Interest Rate (p.a.) 6.56% to 24.99%	Comp. Rate (p.a.) 6.56% to 21.79%	Application Fee $0 - $499	Monthly Fee $0	Monthly Repayment $628.83	Go to site More Info Compare
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 site More Info Compare	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.) 8.49% to 20.49%	Comp. Rate (p.a.) 9.88% to 21.78%	Application Fee $250	Monthly Fee $15	Monthly Repayment $654.15	Go to site More Info Compare
NAB Personal Loan Unsecured Variable Rate Variable1 - 7 Years $5,000 - $55,000	Interest Rate (p.a.) 8.49% to 20.49%	Comp. Rate (p.a.) 9.88% to 21.78%	Application Fee $250	Monthly Fee $15	Monthly Repayment $654.15	Go to site More Info Compare

Showing 6 of 6 results

Lenders

Latitude Financial Services

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

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.
Compare personal loans and find a suitable loan. Look for a new loan with a lower interest rate and minimal fees.
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.
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).
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 $22,213 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
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 type	Remaining debt	Interest rate	Monthly fees	Monthly repayment (inc. fees)
Credit card	$3,500	20%	$10	$141
Car loan	$9,000	7%	$12	$290
Personal loan	$4,000	12%	$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.

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?

Addicted to details. We know taking out a personal loan is something you'll be hooked up with for a while. That's why we put hours into research for this guide (and still do at least once a month)

Rates obsessed. Lenders come in all shapes and sizes, that's why we don't just track the big banks, but all the digi folk too. Pretty much everyone but your parents to be honest.

Cash for whatever you need. Lending rates verified from 180+ products day and night. Whether you're buying a car, rennovating your home or heck just ready to let loose with the spending - we got you.

Frequently asked questions about debt consolidation loans

A debt consolidation loan can be approved in a day, however it will depend on the size and complexity of your debts - as well as your credit history.
Specialised debt consolidation services can take a bit longer, as they will look at your finances and find a tailored solution to your situation. This could make the application process take longer, as the solution may involve things such as negotiating with your current lenders.
Most Australian banks, including Commbank, Westpac, NAB and ANZ offer unsecured personal loans you can use for debt consolidation. Interest rates on these loans vary based on your credit score.
While these banks may not advertise specialised debt consolidation loans, it will be a legitimate loan use reason under "any worthwhile purchase".
Debt consolidation means using a new loan to pay off multiple existing debts. A debt agreement is a new arrangement with an existing lender that lets you avoid bankruptcy while paying off all or part of your debts.
According to the Australian Financial Security Authority a debt agreement is "a legally binding agreement between you and your creditors."
You can only enter into a debt agreement via a registered debt agreement administrator.

Thank you for your feedback!

To make sure you get accurate and helpful information, this guide has been edited by Rebecca Pike as part of our fact-checking process.

Written by

Richard Whitten

Editor

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

Richard's expertise

Richard has written 554 Finder guides across topics including:

Home loans
Property
Personal finance
Money-saving tips

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47 Responses

KateNovember 25, 2016

Any unsecured loans for repaying a U.K. Credit card. Australian citizen. Retired.

Finder

MayNovember 29, 2016Finder

Hi Kate,

Thanks for your question.

Since you are retired, you may want to check the list of personal loans for retirees found on our website. I suggest that you read through the page to get more information on our guide. Before you apply, it’s best to review the criteria and requirements and then contact the lender to discuss your chances of approval.

Hope this helps.

Cheers,
May

MIchaelJune 20, 2016

Hi,
I have considerable debts (Credit cards and unsecure loans)at the moment and looking at what my options are to bring these down. What is the maximum amount of debts that I can have to be considered for either loan consolidation or a debt agreement.

Finder

ElizabethJuly 12, 2016Finder

Hi Michael,

Apologies for the delayed reply.

A debt agreement is an act of bankruptcy while debt consolidation is simply a personal loan that you can apply for with a lender to consolidate your existing debts into one. You can check if you meet the eligibility criteria for a debt consolidation loan by having a look at the individual review pages above.

You are able to propose a debt agreement if you meet the following criteria:
– are insolvent (unable to pay their debts as and when they fall due)
– have not been bankrupt, had a debt agreement or given an authority under Part X of the Bankruptcy Act in the last 10 years (this will be verified by the Official Receiver)
– have unsecured debts, assets (specifically the equity in assets) and after-tax income for the next 12 months all less than the indexed amounts (unsecured debts must be less than $109,036.20 and you cannot earn more than $81,777.15 p.a.)
pay the debt agreement lodgement fee specified in fees and charges (you can check these on the Australian Financial Security Authority’s website).

Keep in mind there are several consequences of a debt agreement, and as I mentioned it is considered an act of bankruptcy.

I hope this information has helped,

Elizabeth

JohnMarch 21, 2016

We are considering a debt consolidation loan or a balance transfer. We have a number of credit cards of which two are maxed out, but have one we do not use (that we have paid out from a balance transfer) and another where we have a big credit limit that we do not need.

Should we cancel the card we don’t use and decrease the limits. That is the logical thing in my head but I read on American sites that this would worsen our credit rating. I am confused.

Finder

ElizabethMarch 22, 2016Finder

Hi John,

Thanks for your inquiry.

The US credit rating system works quite a bit differently from ours, where your credit utilization, or your ratio of debt to credit, has a large effect on your credit score. In Australia, your credit score is affected by information such as credit inquiries, defaults, shopping patterns, and your payment history. You can find out more information on your Equifax score on our guide.

Basically, you can select the debt consolidation method that will help you best get in control of your debt.

I hope this has helped.

Thanks,

Elizabeth

JohnMarch 22, 2016

Thanks for that, so it is different. So will it hurt an application if I leave the limits where they are and if I don’t cancel the card. I have a very good credit history and my wife unbelievably has an excellent one.

Finder

ElizabethMarch 23, 2016Finder

Hi John,

When lenders consider you for a new credit product they take your entire financial circumstances into account – including your available credit limits. It should be noted that lenders cannot see the debt you owe on these cards, only the available credit. So when you apply, they will take the credit limit of these four cards into account and determine your ability to manage these limits as well as another credit product based on your income, credit history, etc.

If you think you may have a better chance of being approved and do not need one of the cards then you have the option of closing the card, but this is up to you.

Hope this information has helped.

Thanks,

Elizabeth

JohnMarch 23, 2016

OK thanks. I will probably limit two of those cards

darrenOctober 15, 2015

hi i have been trying to get a Debt Consolidation,loan for 25000 also to fix my van and a holiday i have payday lenders i wont to put together but is hard to get a loan and a lot of inquiry on my credit history is there anyone that can help me in that roving door trying to get out. thank you

Finder

ElizabethOctober 16, 2015Finder

Hi Darren,

Thanks for your question.

There is a free financial counselling service you might want to get in touch with – you can give them a call on 1800 007 007. You can also have a read of our bad credit debt consolidation guide which might give you some useful information.

I hope this has helped.

Thanks,

Elizabeth

deanJune 28, 2015

my partner and myself have 2 c/cards total $10,000 and a personal loan $16000 while we are able to pay loan with ease we are struggling with c/cards we are with NAB can we consolidate these within our own bank?

Finder

ElizabethJune 29, 2015Finder

Hi Dean,

Thanks for your question.

If you are referring to balance transferring your credit card balance onto an existing NAB card, you are able to do this, however the cards you’re transferring the balance from cannot be a NAB credit card. If you are referring to taking out a personal loan or adding onto an existing loan you have, you should also be able to do this. You can click ‘Go to Site’ alongside the NAB personal loan on this page to find out more about their debt consolidation loan.

I hope this has helped.

Thanks,

Elizabeth

Debt consolidation loans Australia