Debt Consolidation Loans Australia
Juggling multiple debts? Credit cards, personal loans, Buy Now Pay Later - it all adds up. Debt consolidation combines everything into one loan with one repayment. Done right, you could lower your interest rate, reduce your monthly payments, and finally see a clear path to being debt-free.
Simplify Your Finances
Different due dates. Different interest rates. Different minimum payments. When you're juggling multiple debts, it's easy to feel overwhelmed and lose track. One missed payment can snowball into late fees and credit damage.
Debt consolidation is about taking control. By combining your debts into a single loan, you get one manageable repayment, one interest rate, and one clear timeline for becoming debt-free. For many Australians, it's the first step toward financial freedom.
At Your Lending Friend, we compare consolidation loans from over 40 lenders - including options for people with bad credit. Let us help you find a simpler way forward.
How Debt Consolidation Works
Four simple steps to simplify your finances
Add Up Your Debts
Credit cards, personal loans, car loans, Buy Now Pay Later accounts, store cards - list everything you want to consolidate.
Apply for a Consolidation Loan
We compare options from 40+ lenders to find a consolidation loan that covers the total amount you owe.
Pay Off Existing Debts
Use the loan to clear all your other accounts. We can even help arrange direct payouts to your creditors.
Make One Repayment
Enjoy the simplicity of a single payment to your new loan, ideally at a lower overall interest rate.
See the Potential Savings
Here's an example of how consolidation could work
| Debt | Balance | Interest Rate | Monthly Payment |
|---|---|---|---|
| Credit Card 1 | $5,000 | 20% | $150 |
| Credit Card 2 | $3,000 | 22% | $90 |
| Personal Loan | $8,000 | 15% | $300 |
| Buy Now Pay Later | $2,000 | 0%* | $170 |
| Total Before | $18,000 | Mixed | $710/month |
Consolidated at 12% over 5 years
~$400/month
Potential savings: $310/month or $18,600+ over 5 years
*Example only. Actual savings depend on your specific debts, rates, and approved loan terms. BNPL accounts often have deferred interest or fees that aren't reflected in the 0% rate.
Is Debt Consolidation Right for You?
Benefits of Consolidation
- One simple repayment instead of multiple
- Potentially lower overall interest rate
- Clear end date for being debt-free
- Easier to budget and manage finances
- May improve credit score over time
- Stop juggling multiple due dates
Things to Consider
- Extending repayment term may cost more long-term
- Need discipline not to rack up new debt
- Exit fees on current loans may apply
- Higher rates if you have bad credit
- Secured loans put assets at risk
Consolidation may be right for you if:
Bad Credit? You Can Still Consolidate
Having bad credit doesn't mean you're stuck juggling multiple high-interest debts. We work with specialist lenders who offer consolidation options for people with defaults, poor credit history, or past financial difficulties.
Secured Consolidation Loans
Use your car or other asset as security. This can help you access better rates and higher loan amounts, even with defaults on your file.
Specialist Bad Credit Lenders
We work with lenders who focus on your current ability to repay, not just your credit history. Rates will be higher, but it can still save you money.
Debt Agreement Alternatives
If consolidation isn't possible, we can discuss other options like Part IX debt agreements or informal arrangements with creditors.
Debt Consolidation FAQs
Common questions about consolidating your debts
Applying for a new loan creates a hard enquiry, which may temporarily dip your score by a few points. However, if you're approved and close your other accounts, your score should recover and potentially improve as you make consistent repayments on time.
Yes. We work with specialist lenders who offer consolidation...
Yes. We work with specialist lenders who offer consolidation loans for people with defaults or poor credit history. Interest rates will be higher than standard loans, but consolidation can still save you money compared to high-interest credit cards - especially if you're currently paying 20%+ on multiple cards.
Most unsecured debts can be consolidated, including credit c...
Most unsecured debts can be consolidated, including credit cards, personal loans, store cards, medical bills, and Buy Now Pay Later accounts. Secured debts like car loans can sometimes be included depending on the lender and your circumstances.
Savings depend on your current interest rates versus the con...
Savings depend on your current interest rates versus the consolidation loan rate. For example, consolidating $18,000 of credit card debt at 20% into a personal loan at 12% could save you over $300 per month and thousands in total interest. We'll provide specific calculations based on your situation.
This is generally recommended to avoid temptation and to imp...
This is generally recommended to avoid temptation and to improve your debt-to-credit ratio. However, keeping one card with a low limit for emergencies can be sensible. We'll discuss the best approach for your situation during your consultation.
Many consolidation loans can be approved within 24-48 hours....
Many consolidation loans can be approved within 24-48 hours. Once approved, we can arrange for direct payouts to your existing creditors, so you don't have to worry about managing the process yourself.
No. Debt consolidation involves taking out a new loan to pay...
No. Debt consolidation involves taking out a new loan to pay off existing debts - you're still repaying everything you owe. Debt management plans and debt agreements (like Part IX) involve negotiating reduced repayments with creditors and can significantly impact your credit file.
If traditional consolidation isn't possible, we can explore ...
If traditional consolidation isn't possible, we can explore alternatives such as secured loans using an asset, informal payment arrangements with creditors, or in some cases, formal debt agreements. We'll always be honest about your options.
Still have questions? Contact our friendly team