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Personal loans

Personal loans and debt consolidation: two different things, explained plainly.

Personal loans come into debt consolidation in two ways. You might have personal loans you want to roll together, or you might use a new personal loan to pay out other debts, such as credit cards. Either way, it only helps if the new loan costs less overall and the repayment fits your budget.
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Fee-based service. Fees, and any commission we receive from a lender, are explained before you decide.
Good to know before you apply
Lending criteria apply, and some applications are declined
A longer loan term can mean paying more interest overall
Applying adds a credit enquiry to your credit file
Paying out a loan early can attract a break or early repayment fee
A loan secured against your home puts it at risk if repayments are missed

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Be clear which one you mean

Two ways personal loans come into consolidation

The trade-offs overlap, but the questions to ask are slightly different.
Consolidating the personal loans you already have
If you have more than one personal loan, or a personal loan alongside cards and buy now pay later, a new consolidation loan can pay them out so there’s one repayment to keep track of.
Good to know: check for early repayment or break fees on the old loans, particularly fixed-rate ones, and compare the total cost, not just the repayment.
Using a personal loan to consolidate other debts
Many consolidation loans are personal loans. The new loan pays out your other debts, such as credit cards, then you repay it over a fixed term, often with a fixed repayment.
Good to know: it’s new credit, so lending criteria apply and a credit enquiry is recorded. If the old cards or accounts stay open and are used again, you could end up owing more than before.
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Will the new loan leave you better off?

Whichever way it applies to you, the question is the same. A lower rate can help, but fees and the length of the loan matter just as much. Stretching a loan over a longer term can make each repayment smaller while adding to the total interest you pay.

A secured personal loan, such as one secured against a car, may come with a lower rate than an unsecured one, but the asset is at risk if repayments stop. Rolling personal loans into a home loan puts your home up as security; see refinancing your home loan.

Our debt consolidation calculator gives a rough idea of repayments. For how it all fits together, see debt consolidation.

Questions we go through with you
What each current loan costs, and how long is left on it
Whether any loan has a break or early repayment fee
The total cost of the new loan over its full term
Whether the repayment fits your budget, with room to spare
What would happen if your income changed
What it costs: Debt Negotiators is a fee-based service. Fees are explained before you decide, and the first conversation costs nothing. If you take out a loan we arrange, we may receive a commission from the lender. We’ll tell you about it before you decide. The rates are in our Credit Guide.
If a loan isn’t right

If a new loan isn’t realistic

If you’re behind on a personal loan, or a new loan wouldn’t leave you better off, these are the other options we work through with you.

Informal arrangements
We negotiate new repayment terms with each lender, based on what you can realistically pay.
Good to know: creditors don’t have to agree, interest may keep running, and it may show on your credit report.

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Debt agreements (Part IX)
A formal, binding agreement with your creditors to repay an affordable amount over time. We’re an AFSA-registered administrator.
Good to know: it’s a formal insolvency option with income, debt and asset limits, and it’s listed on your credit report and the National Personal Insolvency Index.

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Consolidation with bad credit
If missed payments are already on your credit file, a loan can be harder to get. We explain what lenders look at.
Good to know: some applications are declined, and several in a short time can make the next one harder.

Learn more →

Personal loan consolidation questions

Can I consolidate my personal loans?

Usually, yes. A new consolidation loan can pay out existing personal loans and other debts. Lending criteria apply, some applications are declined, and early repayment fees on the old loans can add to the cost.

Is a personal loan a good way to consolidate debt?

It can be, if the rate, fees and term add up to less than you’re paying now and the repayment fits your budget. A longer term can make each repayment smaller but cost more overall.

Secured or unsecured: which is better?

A secured loan may have a lower rate, but the car, home or other asset is at risk if repayments stop. An unsecured loan doesn’t put an asset at risk, but the rate is usually higher and approval can be harder.

Will consolidating personal loans affect my credit file?

Applying records a credit enquiry, and the new loan appears on your credit file with its repayment history. Keeping up repayments can help over time. Several declined applications in a short time can make the next one harder.

What if I’m already behind on a personal loan?

We go through your whole situation. If a new loan isn’t realistic, we look at an informal arrangement with your lenders or a formal option such as a debt agreement, each with its downsides.

How much does it cost?

The new loan’s rate and fees depend on the lender, the amount and your credit history. Debt Negotiators is a fee-based service, and our fees are explained before you decide. The first conversation costs nothing.

See whether a consolidation loan fits

Answer 9 quick questions, then we call to go through consolidation and the alternatives.
Answer 9 quick questionsCall 1300 351 008
Debt Negotiators is a fee-based service. The information on this page is general and doesn’t take your circumstances into account. Outcomes depend on your situation, and no outcome is guaranteed. Formal options such as debt agreements and personal insolvency agreements can affect your credit report and your ability to get credit. ACL 390820 · AFSA RDAA 1403.
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