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In our debt consolidation loans guide:
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Plenti - Debt Consolidation Loan | |
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Debt consolidation interest rates | 6.57% p.a. to 24.09% p.a. |
Comparison rate* | 6.57% p.a. to 26.28% p.a. |
Loan amounts | $5,000 - $50,000 |
Harmoney - Debt Consolidation Loan | |
Debt consolidation interest rates | 5.76% p.a. to 24.03% p.a. |
Comparison rate* | 6.65% p.a. to 24.98% p.a. |
Loan amounts | $2,000 - $70,000 |
NOW Finance - Debt Consolidation Loan | |
Debt consolidation interest rates | 6.75% p.a. to 26.95% p.a. |
Comparison rate* | 6.75% p.a. to 26.95% p.a. |
Loan amounts | $5,000 - $50,000 |
Pepper Money - Debt Consolidation Loan | |
Debt consolidation interest rates | 6.75% p.a. to 26.95% p.a. |
Comparison rate* | 6.75% p.a. to 26.95% p.a. |
Loan amounts | $5,000 - $50,000 |
Moneyplace - Debt Consolidation Loan | |
Debt consolidation interest rates | 7.24% p.a. to 19.99% p.a. |
Comparison rate* | 7.24% p.a. to 21.49% p.a. |
Loan amounts | Up to $80,000 |
Liberty Financial - Unsecured Personal Loan | |
Debt consolidation interest rates | 7.24% p.a. to 19.99% p.a. |
Comparison rate* | 7.24% p.a. to 21.49% p.a. |
Loan amounts | $5,000 - $80,000 |
ING - Personal Loan for Debt Consolidation | |
Debt consolidation interest rates | 6.89% p.a. to 18.99% p.a. |
Comparison rate* | 7.10% p.a. to 19.23% p.a. |
Loan amounts | $5,000 - $60,000 |
Our Money Market - Debt Consolidation Loan | |
Debt consolidation interest rates | 6.57% p.a. to 18.99% p.a. |
Comparison rate* | 7.19% p.a. to 21.78% p.a. |
Loan amounts | $2,001 - $75,000 |
Great Southern Bank - Debt Consolidation Loan | |
Debt consolidation interest rates | 7.49% p.a. to 19.99% p.a. |
Comparison rate* | 7.74 % p.a. to 20.27% p.a. |
Loan amounts | $5,000 - $75,000 |
Bank of Melbourne - Debt Consolidation Loan | |
Debt consolidation interest rates | 6.89% p.a. to 19.99% p.a. |
Comparison rate* | 7.81% p.a. to 20.83% p.a. |
Loan amounts | $2,000 - $50,000 |
BankSA - Debt Consolidation Loan | |
Debt consolidation interest rates | 6.89% p.a. to 19.99% p.a. |
Comparison rate* | 7.81% p.a. to 20.83% p.a. |
Loan amounts | $2,000 - $50,000 |
St.George Bank - Debt Consolidation Loan | |
Debt consolidation interest rates | 6.89% p.a. to 19.99% p.a. |
Comparison rate* | 7.81% p.a. to 20.83% p.a. |
Loan amounts | $2,000 - $50,000 |
NAB - Personal Loan for Debt Consolidation | |
Debt consolidation interest rates | 6.99% p.a. to 20.49% p.a. |
Comparison rate* | 7.91% p.a. to 21.33% p.a. |
Loan amounts | $5,000 - $55,000 |
ANZ - Personal Loan for Debt Consolidation | |
Debt consolidation interest rates | 7.49% p.a. to 19.99% p.a. |
Comparison rate* | 8.18% p.a. to 20.58% p.a. |
Loan amounts | $5,000 - $50,000 |
G&C Mutual Bank - Personal Loan for Debt Consolidation | |
Debt consolidation interest rates | 7.99% p.a. to 16.99% p.a. |
Comparison rate* | 8.20% p.a. to 17.22% p.a. |
Loan amounts | $1,000 - $90,000 |
Society One- Unsecured Debt Consolidation Loan | |
Debt consolidation interest rates | 9.20% p.a. to 25.89% p.a. |
Comparison rate* | 9.20% p.a. to 26.31% p.a. |
Loan amounts | $5,000 - $50,000 |
Westpac - Personal Loan for Debt Consolidation | |
Debt consolidation interest rates | 7.99% p.a. to 20.49% p.a. |
Comparison rate* | 9.18% p.a. to 21.61% p.a. |
Loan amounts | $4,000 - $50,000 |
Wisr - Debt Consolidation Loan | |
Debt consolidation interest rates | 9.04% p.a. to 23.29% p.a. |
Comparison rate* | 9.88% p.a. to 24.56% p.a. |
Loan amounts | $5,000 - $62,000 |
CommBank - Debt Consolidation Loan | |
Debt consolidation interest rates | 8.49% p.a. to 20.49% p.a. (fixed); 8.00% p.a. to 20.00% p.a. (variable) |
Comparison rate* | 9.88% p.a. to 21.78% p.a. (fixed); 9.40% p.a. to 21.30% p.a. (variable) |
Loan amounts | $4,000 - $50,000 |
Latitude Financial Services - Debt Consolidation Loan | |
Debt consolidation interest rates | 9.49% p.a. to 29.99% p.a. |
Comparison rate* | 10.93% p.a. to 31.83% p.a |
Loan amounts | From $5,000 |
MoneyMe - Debt Consolidation Loan | |
Debt consolidation interest rates | 9.20% p.a. to 25.20% p.a. |
Comparison rate* | 10.58% p.a. to 26.58% p.a. |
Loan amounts | $5,000 - $50,000 |
Fair Go Finance - Debt Consolidation Loan | |
Debt consolidation interest rates | 21.90% p.a. - 25.90% p.a. |
Comparison rate* | 28.71% p.a. - 33.80% p..a |
Loan amounts | $5,050 - $10,000 |
Jacaranda Finance - Debt Consolidation Loan | |
Debt consolidation interest rates | 17.95% p.a. to 24.95% p.a. |
Comparison rate* | 32.40% p.a. to 39.63% p.a. |
Loan amounts | $5,000 - $15,000 |
Debt consolidation interest rates | Comparison rate* | Loan amounts | |
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Plenti - Debt Consolidation Loan | 6.57% p.a. to 24.09% p.a. | 6.57% p.a. to 26.28% p.a. | $5,000 - $50,000 |
Harmoney - Debt Consolidation Loan | 5.76% p.a. to 24.03% p.a. | 6.65% p.a. to 24.98% p.a. | $2,000 - $70,000 |
NOW Finance - Debt Consolidation Loan | 6.75% p.a. to 26.95% p.a. | 6.75% p.a. to 26.95% p.a. | $5,000 - $50,000 |
Pepper Money - Debt Consolidation Loan | 6.75% p.a. to 26.95% p.a. | 6.75% p.a. to 26.95% p.a. | $5,000 - $50,000 |
Moneyplace - Debt Consolidation Loan | 7.24% p.a. to 19.99% p.a. | 7.24% p.a. to 21.49% p.a. | Up to $80,000 |
Liberty Financial - Unsecured Personal Loan | 7.24% p.a. to 19.99% p.a. | 7.24% p.a. to 21.49% p.a. | $5,000 - $80,000 |
ING - Personal Loan for Debt Consolidation | 6.89% p.a. to 18.99% p.a. | 7.10% p.a. to 19.23% p.a. | $5,000 - $60,000 |
Our Money Market - Debt Consolidation Loan | 6.57% p.a. to 18.99% p.a. | 7.19% p.a. to 21.78% p.a. | $2,001 - $75,000 |
Great Southern Bank - Debt Consolidation Loan | 7.49% p.a. to 19.99% p.a. | 7.74 % p.a. to 20.27% p.a. | $5,000 - $75,000 |
Bank of Melbourne - Debt Consolidation Loan | 6.89% p.a. to 19.99% p.a. | 7.81% p.a. to 20.83% p.a. | $2,000 - $50,000 |
BankSA - Debt Consolidation Loan | 6.89% p.a. to 19.99% p.a. | 7.81% p.a. to 20.83% p.a. | $2,000 - $50,000 |
St.George Bank - Debt Consolidation Loan | 6.89% p.a. to 19.99% p.a. | 7.81% p.a. to 20.83% p.a. | $2,000 - $50,000 |
NAB - Personal Loan for Debt Consolidation | 6.99% p.a. to 20.49% p.a. | 7.91% p.a. to 21.33% p.a. | $5,000 - $55,000 |
ANZ - Personal Loan for Debt Consolidation | 7.49% p.a. to 19.99% p.a. | 8.18% p.a. to 20.58% p.a. | $5,000 - $50,000 |
G&C Mutual Bank - Personal Loan for Debt Consolidation | 7.99% p.a. to 16.99% p.a. | 8.20% p.a. to 17.22% p.a. | $1,000 - $90,000 |
Society One- Unsecured Debt Consolidation Loan | 9.20% p.a. to 25.89% p.a. | 9.20% p.a. to 26.31% p.a. | $5,000 - $50,000 |
Westpac - Personal Loan for Debt Consolidation | 7.99% p.a. to 20.49% p.a. | 9.18% p.a. to 21.61% p.a. | $4,000 - $50,000 |
Wisr - Debt Consolidation Loan | 9.04% p.a. to 23.29% p.a. | 9.88% p.a. to 24.56% p.a. | $5,000 - $62,000 |
CommBank - Debt Consolidation Loan | 8.49% p.a. to 20.49% p.a. (fixed); 8.00% p.a. to 20.00% p.a. (variable) | 9.88% p.a. to 21.78% p.a. (fixed); 9.40% p.a. to 21.30% p.a. (variable) | $4,000 - $50,000 |
Latitude Financial Services - Debt Consolidation Loan | 9.49% p.a. to 29.99% p.a. | 10.93% p.a. to 31.83% p.a | From $5,000 |
MoneyMe - Debt Consolidation Loan | 9.20% p.a. to 25.20% p.a. | 10.58% p.a. to 26.58% p.a. | $5,000 - $50,000 |
Fair Go Finance - Debt Consolidation Loan | 21.90% p.a. - 25.90% p.a. | 28.71% p.a. - 33.80% p..a | $5,050 - $10,000 |
Jacaranda Finance - Debt Consolidation Loan | 17.95% p.a. to 24.95% p.a. | 32.40% p.a. to 39.63% p.a. | $5,000 - $15,000 |
Debt consolidation means combining multiple debts into a single loan to make them more manageable. It can help you pay off your debt faster while saving on interest and fees.
Let's say you have multiple personal loans, credit card debt, buy now pay later accounts and other debts with various providers.
With debt consolidation, you join the debts together into a single personal loan, ideally one with a lower interest rate, low fees and flexible repayment options.
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You turn multiple debts into a single amount that can be repaid weekly, fortnightly or monthly.
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The loan term is fixed, with a structured timeframe for repaying the debt. Choose a term from 1-7 years.
3
Personal loan interest rates are often lower than other forms of debt (like credit cards). This saves you money.
A debt consolidation loan works like any other personal loan, but is designed to help you combine and pay off existing debts, rather than take on extra debt for a new purchase or expense.
For example, credit card consolidation loans are a common option.
Debt consolidation loans generally allow you to borrow between $2,000 and $50,000 (depending on the lender) and repay it over a period of 1-7 years.
Most lenders that offer personal loans allow their loans to be used for debt consolidation. Your application for a debt consolidation loan will be subject to the lender’s assessment criteria, including a credit check.
Current situation | Debt consolidation | |
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Credit card repayment | $174/month | $0 |
Personal loan repayment | $104/month | $0 |
Total repayment | $278/month across two separate payments | $273 in a single payment |
Total interest cost | $4,294 | $3,117 |
Interest saved | -$1,177 |
Add up the balances of each to arrive at the total debt amount for consolidating. Make a note of the interest rate you’re being charged on each and how long the term is.
This will give you an idea of whether you’ll be eligible for a debt consolidation loan. If you’ve defaulted (missed repayments) on your current loans, you may not be eligible for a new loan.
Consider your desired loan amount, the interest rate you’re currently paying on your debts and the loan term. Ideally you want a lower interest rate and a shorter term. Only compare loans from reputable lenders.
You’ll need to give the lender details about your existing loans by providing loan/credit card statements, as well as information about other aspects of your financial situation (e.g. income and expenses).
If you're approved, the lender will either pay the debt consolidation loan funds to you for you to pay off your other debts, or arrange for the money to be sent directly to your other lenders to settle those debts.
Currently, the lowest debt consolidation loan interest rates in Australia start from 6.00 - 7.00% p.a.
Borrowers with a good credit rating will be eligible for the cheapest debt consolidation interest rates. But rates for some individuals will be higher. For example, for bad credit debt consolidation loans, interest rates generally start from 15-20%.
To give you an idea of the rates real borrowers typically pay, the average interest rate quoted on a debt consolidation loan is 14.64% p.a., based on thousands of loan requests analysed by Money.com.au.
This is slightly higher than the overall average interest rate for all personal loan purposes (13.87% p.a.). But to put it into perspective, the average interest rate on credit card balances incurring interest is over 18%.
On top of your credit rating, factors like your income, employment status and whether the loan is secured or not could impact your loan interest rate.
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See what debt consolidation rates you actually qualify for by comparing multiple lenders at once.
GET STARTEDGET STARTEDHere are Money.com.au's top tips for getting the best deal on a debt consolidation loan.
Look for a rate that’s lower than what you’re paying on your existing debts. But when comparing loans, don't assume that a lender’s headline advertised rate will be the rate you pay. Your actual rate could be higher (see example below). This is why getting personalised rates from multiple lenders is important.
Consider all the fees you could end up paying on your debt consolidation loan. That means application and establishment fees, ongoing fees and early repayment fees. The loan’s comparison rate will include most of the loan fees. If you see a debt consolidation loan with a comparison rate that’s much higher than the interest rate, the difference is made up by fees.
Choose your loan term carefully and factor it in when calculating the overall cost of your debt consolidation loan. A low regular repayment over a long loan term could end up costing you more than a high regular repayment for a shorter term. Here’s an example of the impact the loan term van have from our debt consolidation loan calculator.
Look for options like a choice of weekly, fortnightly or monthly repayments, plus the ability to repay the loan early if you can afford to chip away at the balance with extra repayments. Just watch out for lenders that charge fees for this convenience.
Avoid adding to your debt by borrowing more than you need to cover the debts you are consolidating.
In summary....
You can apply for a debt consolidation loan in Australia if you are:
Lenders will also look closely at your financial situation before deciding if you’re eligible. They'll consider:
The lender will ask to see evidence such as bank statements and payslips to demonstrate your financial position.
Debt can take a big toll on you, financially and mentally. A debt consolidation loan can be a way to take back some control over your situation.
But it’s not always the right solution according to David Berry, Chief Executive Officer of Way Forward, a not for-profit-organisation that helps Australians deal with their debt.
“People struggling financially usually have less planning or structure to manage their debts. Personal loans on the other hand have a fixed repayment,” David explained.
“Generally once a structured repayment arrangement is in place, the more people see the debt reducing and the faster they make the payments to clear the debt. It’s not true for everyone but it has been the general trend we have observed.”
According to David, there’s a big difference between how a debt consolidation loan can help in theory and knowing whether it is the right solution for you.
People can “rely too heavily on a lender’s view,” he said. “If the lender approves it, then it must be ok? But that isn’t necessarily the case.”
Instead he said borrowers should look at their own budget to figure out if the new loan is affordable in the long run.
“Talk to a financial counsellor or the National Debt Helpline (1800 007 007) to see what other options you might have available. Having an independent person to help you can do wonders for your confidence and your ability to come up with something realistic for your circumstances.”
David Berry, CEO of Way Forward
Unlike debt consolidation, with payment consolidation you keep the debts separate but arrange them so that all the payments are made at the same time each week, fortnight or month.
This way it seems like you have a single repayment.
You could also negotiate with the individual lenders on the repayment amounts at the same time if needed.
There's no minimum credit score for getting a debt consolidation loan in Australia. But some individual lenders (particularly the major banks) may have limits.
Whether or not your application is approved will come down to a combination of factors. For example, if you can demonstrate that you will be able to comfortably meet the loan repayments, you may be approved for a debt consolidation loan, even with a bad credit score.
But your credit score will likely impact what interest rate you pay.
Here's an estimate of how different credit score levels (based on how credit reporting company Equifax groups them) could impact your interest rate:
Excellent credit score (853 to 1,200): Usually these borrowers have access to a lender's lowest debt consolidation interest rates.
Very good credit score (735 to 852): Depending on the lender, your interest rate may be 2-3% higher than borrowers with an excellent credit score.
Good credit score (661 to 734): Your interest rate could be around 5-6% higher than the lender's lowest advertised rate.
Average credit score (460 to 660): Your interest rate could be 8-9% higher than the lowest rate available.
Below average credit score (0 to 459): Your choice of lenders is likely to be quite limited and you may only have access to very high interest rates, starting from around 20-25% p.a. and potentially higher in some cases.
Not usually. Provided you meet the lender’s credit criteria, your debt consolidation loan should have a similar interest rate to comparable personal loan products.
Yes, most lenders offer unsecured debt consolidation loans. These may have higher interest rates than secured loans but won’t require you to use your assets as security.
Every case is different and the answer to this question will depend on your home loan and the debts you're consolidating.
However, because home loans generally have longer terms than other forms of household debt, consolidating other debts into your mortgage could end up costing you more in the long run.
If you're eligible for the loan, the application process for a debt consolidation loan can be quite quick and straightforward. It’s similar to refinancing a personal loan.
With most lenders you can complete the process online and your loan could be approved and funded the same day in some instances.
For borrowers with more complicated circumstances, such as having bad credit, it can take longer and you may need to provide additional evidence to support your application.
Self employed borrowers may need to follow a different process to prove their income and this could take longer.
Consolidating your debt requires a new credit application which may have a short-term impact on your credit score. However, if consolidating your debt makes repaying your debt more manageable (and less likely you will miss repayments), this may help you pay off your debt faster which could help improve your credit score in the long-run.
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*Information about comparison rates Comparison rates are designed to allow borrowers to understand the true cost of a loan by taking into account fees and charges, the loan amount and the term of the loan. The comparison rate is based on an unsecured fixed rate personal loan of $10,000 over 3 years. WARNING: Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.