Debt Consolidation Loans Australia

Reviews of debt consolidation loan products available in Australia in 2026. All lenders hold an Australian Credit Licence and must assess whether consolidation is actually suitable for your situation under responsible lending obligations — a consolidation loan should reduce your overall cost or complexity, not just defer the problem.

A debt consolidation loan combines multiple existing debts — credit cards, store cards, other personal loans or a buy-now-pay-later balance — into a single new loan with one interest rate and one repayment. This can lower your overall interest cost if the new rate is below the blended rate of your existing debts, and it simplifies budgeting by replacing several due dates with one.

Consolidation is most effective when you also stop using the credit cards or facilities you have just paid off; otherwise, you risk ending up with the new loan repayment plus fresh balances on the old accounts. Some lenders will pay your existing creditors directly as part of the settlement process, which removes the temptation to spend the funds elsewhere.

Eligibility is broadly the same as for a standard personal loan: 18+, Australian resident, regular income and an acceptable credit history, though specialist lenders also serve borrowers with a patchy credit file at a correspondingly higher rate. You will need to provide statements or payout figures for each debt you want to consolidate.

When comparing offers, calculate the total interest and fees you will pay over the full term of the new loan against what you would pay if you kept your existing debts as they are — a lower monthly repayment achieved by stretching the term can sometimes cost more overall, so always check the total cost of credit, not just the monthly figure.

Debt consolidation works by taking out one new loan to pay off several existing debts — credit cards, store cards, buy-now-pay-later balances or other personal loans — leaving a single repayment, interest rate and due date instead of several. It can reduce the total interest paid when the new rate is meaningfully lower than the blended rate on the old debts, and it can make budgeting easier, but it is not automatically cheaper: stretching the same balance over a longer term can increase total interest even at a lower rate.

Both secured and unsecured consolidation loans are available. Secured options (against a car or property) usually offer lower rates but put the asset at risk if repayments are missed; unsecured options avoid that risk but typically cost more. Under the National Consumer Credit Protection Act 2009, the lender must assess whether consolidating is actually suitable for your situation, not just whether you can make the new repayment.

Before consolidating, check whether your existing debts carry exit or early-payout fees, confirm the new loan's comparison rate and total fees, and make sure old accounts (especially credit cards) are closed or have their limits reduced after payout — otherwise it is easy to run the old balances back up on top of the new consolidated loan.