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Debt consolidation

Living with high levels of personal debt can be financially and emotionally draining. So it’s important to look at ways to get back on track with money management, regain control of your cash and become (and stay) debt-free.


Debt consolidation – find a way forward

Part of the challenge of dealing with unmanageable debt is the need to make multiple repayments to a variety of different lenders. That’s where debt consolidation can help. It works by folding a number of different debts into a single loan.

Your home loan is often a good choice for debt consolidation as it usually comes with the lowest rate of all types of credit. The downside is that you may be transferring a short term debt (like a credit card balance) into a long term loan (your home loan). Paying a bit more off your loan each month is a sensible step to minimise overall interest charges.

If you’re not a home owner, a personal loan can be a good choice to consolidate debt. The term is fixed so you have a clear end date, and the set repayments are easier to budget for.

Your Mortgage Choice financial adviser can recommend the best strategy to consolidate debts for your situation.

With your debt streamlined into a single loan, you can start to focus on making a single monthly payment, which can be far less stressful than juggling a number of repayments.

Saving on interest

By opting for a loan with a competitive rate, debt consolidation can also reduce the overall interest charges you pay. This can lower your regular repayments and provide extra cash to help pay off the new loan sooner.

In this way, the debt pendulum starts to swing in your favour, and you begin to take measurable strides towards becoming debt-free.

Understanding the bigger picture

While debt consolidation can provide an immediate strategy to help you gain control over debt, it doesn’t address the underlying problems, which usually involve weak spots in money management.

Your Mortgage Choice financial adviser can offer valuable support here, helping you learn to live within a budget, manage your money, and work towards financial goals for the future.   


Refinancing to consolidate debt

Like many Australians you could have several debts – probably a home loan, a personal loan, and possibly even a credit card balance. Having multiple debts means juggling lots of different repayments.

This video outlines some of the benefits of refinancing to consolidate debt.

Our top five interest rates available


Lender
Interest
Rate
Comparison
Rate

Credit criteria, conditions, fees and charges apply. Subject to suitability. The comparison rates in this table are based on a loan amount of $150,000 and a term of 25 years. Warning: This Comparison Rate applies only to the example or examples given. Different amounts and terms will result in different Comparison Rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the Comparison Rate but may influence the cost of the loan.

Lender
Interest
Rate
Comparison
Rate

Credit criteria, conditions, fees and charges apply. Subject to suitability. The comparison rates in this table are based on a loan amount of $150,000 and a term of 25 years. Warning: This Comparison Rate applies only to the example or examples given. Different amounts and terms will result in different Comparison Rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the Comparison Rate but may influence the cost of the loan.

Talk to us today about your debt consolidation options

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