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Debt consolidation loan comparison Australia
Harmoney - Debt Consolidation Loan | |
Debt consolidation interest rate | 5.76% p.a. - 24.03% p.a. |
Comparison rate* | 6.55% p.a. - 24.98% p.a. |
Loan amounts | $2,000 - $70,000 |
Plenti - Debt Consolidation Loan | |
Debt consolidation interest rate | 6.57% p.a. - 24.09% p.a. |
Comparison rate* | 6.57% p.a. - 26.28% p.a. |
Loan amounts | $5,000 - $50,000 |
NOW Finance - Debt Consolidation Loan | |
Debt consolidation interest rate | 6.75% p.a. - 26.95% p.a. |
Comparison rate* | 6.75% p.a. - 26.95% p.a. |
Loan amounts | $5,000 - $50,000 |
Pepper Money - Debt Consolidation Loan | |
Debt consolidation interest rate | 6.75% p.a. - 26.95% p.a. |
Comparison rate* | 6.75% p.a. - 26.95% p.a. |
Loan amounts | $5,000 - $50,000 |
ING - Personal Loan for Debt Consolidation | |
Debt consolidation interest rate | 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 rate | 6.57% p.a. - 18.99% p.a. |
Comparison rate* | 7.19% p.a. - 21.78% p.a. |
Loan amounts | $2,001 - $75,000 |
Moneyplace - Debt Consolidation Loan | |
Debt consolidation interest rate | 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 rate | 7.24% p.a. - 19.99% p.a. |
Comparison rate* | 7.24% p.a. - 21.49% p.a. |
Loan amounts | $5,000 - $80,000 |
MoneyMe - Debt Consolidation Personal Loan | |
Debt consolidation interest rate | 6.74% p.a. - 24.49% p.a. |
Comparison rate* | 8.13% p.a. - 25.87% p.a. |
Loan amounts | $5,000 - $50,000 |
ANZ - Personal Loan for Debt Consolidation | |
Debt consolidation interest rate | 7.49% p.a. - 19.99% p.a. |
Comparison rate* | 8.18% p.a. - 20.58% p.a. |
Loan amounts | $5,000 - $50,000 |
G&C Mutual Bank - Personal Loan for Debt Consolidation | |
Debt consolidation interest rate | 7.99% p.a. - 16.99% p.a. |
Comparison rate* | 8.20% p.a. - 17.22% p.a. |
Loan amounts | $1,000 - $90,000 |
Society One - Unsecured Debt Consolidation Loan | |
Debt consolidation interest rate | 8.20% p.a. - 24.89% p.a. |
Comparison rate* | 8.27% p.a. - 25.64% p.a. |
Loan amounts | $5,000 - $50,000 |
Great Southern Bank - Debt Consolidation Loan | |
Debt consolidation interest rate | 7.99% p.a. to 19.99% p.a. |
Comparison rate* | 8.31% p.a. to 20.35% p.a. |
Loan amounts | $5,000 - $75,000 |
Bank of Melbourne - Debt Consolidation Loan | |
Debt consolidation interest rate | 7.49% p.a. - 20.59% p.a. |
Comparison rate* | 8.40% p.a. - 21.43% p.a. |
Loan amounts | $2,000 - $50,000 |
BankSA - Debt Consolidation Loan | |
Debt consolidation interest rate | 7.49% p.a. - 20.59% p.a. |
Comparison rate* | 8.40% p.a. - 21.43% p.a. |
Loan amounts | $2,000 - $50,000 |
St.George Bank - Debt Consolidation Loan | |
Debt consolidation interest rate | 7.49% p.a. - 20.59% p.a. |
Comparison rate* | 8.40% p.a. - 21.43% p.a. |
Loan amounts | $2,000 - $50,000 |
Westpac - Personal Loan for Debt Consolidation | |
Debt consolidation interest rate | 7.99% p.a. - 20.49% p.a. |
Comparison rate* | 9.18% p.a. - 21.61% p.a. |
Loan amounts | $4,000 - $50,000 |
Wisr - Debt Consolidation Loan | |
Debt consolidation interest rate | 8.49% p.a. - 23.29% p.a. |
Comparison rate* | 9.33% p.a. - 24.05% p.a. |
Loan amounts | $5,000 - $62,000 |
NAB - Personal Loan for Debt Consolidation | |
Debt consolidation interest rate | 8.49% p.a. - 20.49% p.a. |
Comparison rate* | 9.54% p.a. - 21.49% p.a. |
Loan amounts | $5,000 - $55,000 |
CommBank - Debt Consolidation Loan | |
Debt consolidation interest rate | 8.50% p.a. - 20.50% p.a. (fixed); 8.50% p.a. - 20.50% p.a. (variable) |
Comparison rate* | 9.89% p.a. - 21.79% p.a. (fixed); 9.89% p.a. - 21.79% p.a. (variable) |
Loan amounts | $4,000 - $50,000 |
Latitude Financial Services - Debt Consolidation Loan | |
Debt consolidation interest rate | 9.49% p.a. - 29.99% p.a. |
Comparison rate* | 10.93% p.a. - 31.83% p.a |
Loan amounts | From $5,000 |
Fair Go Finance - Debt Consolidation Loan | |
Debt consolidation interest rate | 21.90% p.a. - 25.90% |
Comparison rate* | 28.71% p.a. - 33.80% p.a. |
Loan amounts | $5,050 - $10,000 |
Jacaranda Finance - Debt Consolidation Loan | |
Debt consolidation interest rate | 17.95% p.a. - 27.95% p.a. |
Comparison rate* | 32.40% p.a. - 42.80% p.a. |
Loan amounts | $5,000 - $15,000 |
| Debt consolidation interest rate | Comparison rate* | Loan amounts | |
|---|---|---|---|
Harmoney - Debt Consolidation Loan | 5.76% p.a. - 24.03% p.a. | 6.55% p.a. - 24.98% p.a. | $2,000 - $70,000 |
Plenti - Debt Consolidation Loan | 6.57% p.a. - 24.09% p.a. | 6.57% p.a. - 26.28% p.a. | $5,000 - $50,000 |
NOW Finance - Debt Consolidation Loan | 6.75% p.a. - 26.95% p.a. | 6.75% p.a. - 26.95% p.a. | $5,000 - $50,000 |
Pepper Money - Debt Consolidation Loan | 6.75% p.a. - 26.95% p.a. | 6.75% p.a. - 26.95% p.a. | $5,000 - $50,000 |
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. - 18.99% p.a. | 7.19% p.a. - 21.78% p.a. | $2,001 - $75,000 |
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. - 19.99% p.a. | 7.24% p.a. - 21.49% p.a. | $5,000 - $80,000 |
MoneyMe - Debt Consolidation Personal Loan | 6.74% p.a. - 24.49% p.a. | 8.13% p.a. - 25.87% p.a. | $5,000 - $50,000 |
ANZ - Personal Loan for Debt Consolidation | 7.49% p.a. - 19.99% p.a. | 8.18% p.a. - 20.58% p.a. | $5,000 - $50,000 |
G&C Mutual Bank - Personal Loan for Debt Consolidation | 7.99% p.a. - 16.99% p.a. | 8.20% p.a. - 17.22% p.a. | $1,000 - $90,000 |
Society One - Unsecured Debt Consolidation Loan | 8.20% p.a. - 24.89% p.a. | 8.27% p.a. - 25.64% p.a. | $5,000 - $50,000 |
Great Southern Bank - Debt Consolidation Loan | 7.99% p.a. to 19.99% p.a. | 8.31% p.a. to 20.35% p.a. | $5,000 - $75,000 |
Bank of Melbourne - Debt Consolidation Loan | 7.49% p.a. - 20.59% p.a. | 8.40% p.a. - 21.43% p.a. | $2,000 - $50,000 |
BankSA - Debt Consolidation Loan | 7.49% p.a. - 20.59% p.a. | 8.40% p.a. - 21.43% p.a. | $2,000 - $50,000 |
St.George Bank - Debt Consolidation Loan | 7.49% p.a. - 20.59% p.a. | 8.40% p.a. - 21.43% p.a. | $2,000 - $50,000 |
Westpac - Personal Loan for Debt Consolidation | 7.99% p.a. - 20.49% p.a. | 9.18% p.a. - 21.61% p.a. | $4,000 - $50,000 |
Wisr - Debt Consolidation Loan | 8.49% p.a. - 23.29% p.a. | 9.33% p.a. - 24.05% p.a. | $5,000 - $62,000 |
NAB - Personal Loan for Debt Consolidation | 8.49% p.a. - 20.49% p.a. | 9.54% p.a. - 21.49% p.a. | $5,000 - $55,000 |
CommBank - Debt Consolidation Loan | 8.50% p.a. - 20.50% p.a. (fixed); 8.50% p.a. - 20.50% p.a. (variable) | 9.89% p.a. - 21.79% p.a. (fixed); 9.89% p.a. - 21.79% p.a. (variable) | $4,000 - $50,000 |
Latitude Financial Services - Debt Consolidation Loan | 9.49% p.a. - 29.99% p.a. | 10.93% p.a. - 31.83% p.a | From $5,000 |
Fair Go Finance - Debt Consolidation Loan | 21.90% p.a. - 25.90% | 28.71% p.a. - 33.80% p.a. | $5,050 - $10,000 |
Jacaranda Finance - Debt Consolidation Loan | 17.95% p.a. - 27.95% p.a. | 32.40% p.a. - 42.80% p.a. | $5,000 - $15,000 |
What is debt consolidation?
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.
Debt consolidation is by far the most common reason people look for a personal loan in Australia, according to real borrower data from Money. More than half (57%) of all loan requests are for debt consolidation, with an average loan request of $22,573.
Benefits of consolidating debt
1
You turn multiple debts into a single amount that can be repaid weekly, fortnightly or monthly.
2
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.
How do debt consolidation loans work?
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 will be subject to the lender’s assessment criteria, including a credit check.
Debt consolidation loan case study
Let’s take the example of a person with a $7,000 credit card debt at an interest rate of 18%, plus a $3,000 personal loan at 15% interest with three years left on the loan term. Here’s the difference combining these debts into a debt consolidation loan at 14% interest over four years could make.
| Current situation | Debt consolidation | |
|---|---|---|
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 |
How to consolidate debt in 5 steps
It helps to be organised before you apply for loans. Here's an idea of where to start.
1. Make a list of the debts you want to consolidate
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.
2. Check your credit report and score
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.
3. Compare debt consolidation loans
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.
4. Apply for the loan that best fits your needs
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).
5. Clear your existing debts using the new loan
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.
Bonus tip: Make sure your existing debts are paid off in full and the accounts are closed so you’re not tempted to take on new debt.
Best debt consolidation loan interest rates in Australia
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.
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.
How to find the best debt consolidation loans and lenders
Here are Money.com.au's top tips for getting the best deal on a debt consolidation loan.
1. Find the lowest debt consolidation loan interest rate you qualify for
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.
2. Watch out for high loan fees
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.
Don't forget: you may also need to pay fees to your existing lenders to close off your debts as part of the debt consolidation process.
4. Get the shortest loan term you can afford
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.
5. Look for repayment flexibility
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.
6. Match the loan amount to your existing debt
Avoid adding to your debt by borrowing more than you need to cover the debts you are consolidating.
Who is eligible for a debt consolidation loan?
You can apply for a debt consolidation loan in Australia if you are:
- Over the age of 18; and
- An Australian citizen or permanent resident; and
- Employed or have another regular source of income
Lenders will also look closely at your financial situation before deciding if you’re eligible. They'll consider:
- Your credit history and credit score
- Your income level
- Your employment history
- Your expenses
- Any other debts you have (on top of what you’re consolidating)
- What assets you own (e.g. a home or car)
The lender will ask to see evidence such as bank statements and payslips to demonstrate your financial position.
Is a debt consolidation loan a good way to get out of debt?
(Expert's view)
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.
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