Simplify your debts

Debt Consolidation Loans: One Repayment, One Plan

Juggling several cards and loans? Rolling them into one can make life simpler, if the numbers genuinely work in your favour.

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Clearing the clutter

Is it time to bring your debts together?

Three credit cards, a buy now pay later account and an old store card can mean five due dates, five sets of fees and constant mental arithmetic. It's exhausting, and it's easy to miss one.

A debt consolidation loan is a personal loan used to pay out several existing debts, leaving you with a single repayment over a fixed term with a clear finish line.

It's a tool, not a cure. It works best when it lowers your overall cost or gives you a realistic end date, and when you stop the old debts building up again.

A debt consolidation loan pays off several existing debts, such as credit cards and personal loans, and replaces them with one loan and one repayment. It can reduce stress and sometimes cost, but only if the new loan's total cost is lower and you avoid running the old accounts back up.

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Debt Consolidation Loans: One Repayment, One Plan – Business owner's laptop and coffee on a desk

Honest maths

When consolidation helps, and when it doesn't

Compare total cost, not just the size of the repayment.

It can help when

The new loan costs less overall and gives you a fixed payoff date you can stick to.

It may not help when

A longer term lowers the repayment but raises the total interest you pay.

It backfires when

The cleared credit cards fill up again, leaving you with more debt than before.

How does a debt consolidation loan work?

You list the debts you want to clear. If approved, the lender pays them out, or provides funds for you to do it, and you then repay one loan over an agreed term.

Approval can be quick, and funds may be available as soon as the next business day for eligible applicants. Have recent statements for every debt ready so payout figures are accurate.

Will consolidating my debts save money?

It might. Add up what you'd pay to clear each debt as it stands, then compare that with the total repayable on the new loan, including fees. If the new figure is lower, consolidation is saving you money.

If it only lowers the monthly repayment by stretching the term, it may cost more over time. That trade-off can still be worth it for breathing room, as long as you choose it knowingly.

What should I do with the old credit cards?

This is where consolidation succeeds or fails. Consider closing cards once they're paid out, or at least lowering their limits. An empty card with a generous limit is a standing invitation to slip back into old habits.

A few habits make a big difference.

Set up an automatic repayment just after payday
Keep a small emergency buffer, even a modest one
Track spending for the first three months
Avoid new buy now pay later accounts while you repay

Can I consolidate debts with bad credit?

It may be possible, especially if your recent repayment history is steady. Our page on bad credit personal loans explains what lenders look for.

If debts feel unmanageable, the free National Debt Helpline (1800 007 007) can talk through options such as hardship arrangements before you take on a new loan.

Ready to simplify?

If the total cost stacks up and you've got a plan for the old accounts, start your application. List every debt accurately so a real person can match you first time, subject to lender approval.

Business debts are different. Owners with several business facilities should look at business debt consolidation loans instead. Need cash for a one-off cost? See fast personal loans.

Trust and process

Clear, secure finance enquiries

Loanster keeps the enquiry process straightforward: no credit check to enquire, a real person looks at your situation, and your details are not sprayed out to a pile of lenders.

Secure online enquiry

Personal details are submitted through a secure form and are not sent through URL query strings.

Australian business context

Enquiries can include ABN, BAS, ATO, bank statement and asset details where relevant.

Lender criteria apply

Approval, pricing, loan amounts and funding times depend on lender assessment.

Clear next steps

Loanster helps identify what information may be needed before a lender can make a decision.

Common questions

Debt Consolidation Loans: One Repayment, One Plan FAQs

Does debt consolidation hurt my credit score?

The application is recorded on your file, but paying one loan on time and reducing card balances can help over time.

Can I include buy now pay later debts?

Often, yes. Lenders usually ask you to list them along with your other debts.

Should I close my credit cards after consolidating?

Closing or reducing limits removes the temptation to rebuild the debt, and lenders may view lower limits favourably.

Can I consolidate a car loan too?

Sometimes, but check for early payout fees and whether the car is security on that loan.

How long is a typical consolidation loan?

Terms vary by lender. Choose the shortest term with a repayment you can comfortably manage.

Is debt consolidation the same as a debt agreement?

No. A debt agreement is a formal arrangement with serious consequences. A consolidation loan is simply a new loan.

Related finance options

See what you may qualify for

Start your application online and see your options. Credit is subject to lender assessment, responsible lending checks, fees and terms.

Prefer to talk? Call 03 9999 7370.

Last reviewed: 24 October 2026

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