First, what are we actually talking about?
Debt consolidation means taking out a new loan to pay out eligible existing debts. Instead of making separate repayments on a credit card, personal loan and BNPL accounts, you make repayments on the new loan. The amount you owe has not magically vanished. You have changed the structure around it. That distinction matters when a smaller monthly payment looks tempting.
This site focuses on unsecured personal borrowing. That means debts that are not backed by a particular asset as security. Mortgages, investment property debt and HECS-HELP do not belong in this calculator. Secured vehicle loans and business borrowing need a separate conversation. Start by identifying what kind of debt each balance actually is, rather than grouping everything under “money I owe”.
Step 1: get the full picture before comparing
Collect your latest statements and list each balance, rate, repayment and payment frequency. Include store cards and BNPL accounts you might not think of as loans. Check whether a statement balance is the same as the amount needed to close the account. Interest, pending transactions or payout charges can mean the final amount is different.
Use repayments you actually make, not the amount you wish you could pay. If your payments vary, review recent statements and be clear about the assumption you use. The calculator turns weekly and fortnightly amounts into monthly equivalents. That lets you compare the overall commitment without treating every month as if it contains the same number of payment dates.
Step 2: talk through the options with a broker
A credit broker can discuss your circumstances and potential loan options. Expect questions about income, expenses, existing debts and what you want the new arrangement to achieve. Maybe you want fewer due dates. Maybe your cashflow feels squeezed. Being clear about the problem helps you compare a loan against other options rather than assuming another loan is automatically the answer.
Ask about the proposed term, total amount repayable, fees, repayment flexibility and the costs of paying out old accounts. The example calculator uses a fixed illustrative rate and term; it is not a personalised quote. A real loan can have different conditions. A broker conversation is also not the same as an approval. Ask when a credit enquiry would happen before authorising an application.
Step 3: apply, then let the lender assess
If you choose to proceed, an application generally needs identity information, evidence of income, bank statements and details of your debts and expenses. Requirements vary. Supply accurate information and use the secure document-sharing method provided. Do not leave out a smaller account just because it feels insignificant. It is still part of your commitments.
The lender assesses the application under its policies and legal obligations. That can include checking credit history and whether the repayments are suitable and affordable. It may ask questions or request more documents. There is no guaranteed outcome or set timeline promised here. Keep making existing repayments while an application is being considered unless you have agreed another arrangement with your provider.
Step 4: old debts are paid out — check the details
If a loan is approved and accepted, the payout process follows the lender’s requirements. The new loan may pay nominated creditors directly, or another documented process may apply. Confirm who is responsible for each payment. Do not assume an account is closed just because a balance has been paid. Card limits, subscriptions and transactions still in progress can complicate the tidy-up.
Keep payout confirmations and check the old accounts again. Ask what happens if the final amount changes between obtaining a quote and settlement. Move recurring payments before closing a card, and follow the agreed account-closure conditions. These practical details are not glamorous, but they stop the new arrangement from starting with an unexpected leftover balance.
Step 5: one repayment, with a plan around it
Set up the new repayment in a way that fits your income cycle and the lender’s terms. A monthly loan repayment can still feel awkward if your pay arrives fortnightly, so organise your budget around the actual dates. Leave room for essentials and irregular bills. If the repayment only works in an unusually cheap month, revisit the assumptions before committing.
The big risk is rebuilding balances on cleared cards or BNPL accounts. Then you have the consolidation loan plus fresh debt. Consider closing accounts or reducing limits where appropriate, and check any loan conditions. Extra repayments may reduce interest if the loan permits them without unsuitable costs. Ask rather than assume. One repayment is useful only when the wider spending plan is workable.
When another loan is not the next step
A longer loan term may make each repayment smaller while increasing interest over the life of the debt. Moving a no-interest BNPL balance into an interest-bearing loan can also add cost. Compare like with like, include fees and think about how long the current debts would otherwise take to repay. The smallest repayment is not necessarily the best outcome.
If repayments are already unmanageable, talk to your existing providers about financial hardship assistance. Free, confidential financial counselling is available through the National Debt Helpline on 1800 007 007 or ndh.org.au. You do not need to take out a new loan to ask for help. Use the calculator as a starting picture, then seek the kind of support that fits your circumstances.
Information on this site is general in nature and does not take into account your objectives, financial situation or needs. All credit is subject to financier approval, lender assessment, eligibility criteria, terms, fees and charges.
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