Compare debt consolidation loan rates in 60 seconds

I’ve explained debt consolidation in detail. But payment consolidation is another approach where 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 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 debts.

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 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.

Most debt consolidation lenders operate throughout the country. Whilst most are located in the major capital cities like Perth, Sydney, Melbourne, Brisbane, Adelaide and Hobart, they often have local representatives across the smaller cities as well.

All the lenders we work with have Australian based teams. So rest assured, when arranging your loan you'll be working with a lender in Australia.