What is a debt consolidation loan?

It is a loan used to combine multiple existing debts into one repayment, ideally with clearer structure and potentially lower overall cost.

Can debt consolidation reduce monthly repayments?

Yes, often by extending term length, but this can increase total repayment. Always compare total cost, not monthly repayment alone.

Should I close old accounts after consolidation?

Many borrowers do this to avoid rebuilding balances. The right approach depends on account type, fees, and personal spending controls.

How do I compare consolidation offers?

Compare comparison rate, fees, repayment term, flexibility, and lender hardship policies before selecting an offer.

Can consolidation hurt my credit profile?

Applying for new credit can involve enquiries, but the long-term effect depends on repayment behaviour and debt management after consolidation.

Should I keep old cards open after consolidating?

That depends on account fees and spending discipline. Many borrowers reduce available limits to avoid rebuilding balances.

Is lower monthly repayment always better?

Not always. Lower monthly amounts can come from longer terms that increase total repayment.

Is Credizen a lender?

No. Credizen is a comparison service and does not provide loans or personal financial advice.

Debt Consolidation Loans Australia - How To Compare Safely

Author: Rostislav Sikora · Last updated: 19 June 2026

Debt consolidation can simplify repayments by replacing multiple debts with one loan. It can improve visibility and cashflow control, but only if the new loan has suitable total cost and repayment structure for your circumstances.

What is debt consolidation in practice?

Most borrowers use consolidation to combine credit card balances, personal loans, and other high-cost unsecured debt. Instead of tracking multiple due dates and rates, you manage one repayment schedule.

Compare offers

Lender	Amount	Comparison rate from	Approval timing	Review
MoneyMe	A$5,000-A$50,000	from 11.47% p.a.	As fast as same day	View lender
Plenti	A$5,000-A$50,000	from 8.99% p.a.	Usually 1-2 business days	View lender
Wisr	A$5,000-A$64,000	from 7.95% p.a.	Varies by verification	View lender

Loan cost example

Illustrative scenario: A$15,000 consolidated over 36 months at a comparison rate of 12.2% p.a.

Estimated monthly repayment: around A$500
Estimated total repayment: around A$18,000
Estimated total cost above principal: around A$3,000

Always compare this against your current debt totals, remaining terms, and fees before refinancing.

How to apply

List all current debts and rates.
Estimate combined monthly repayment and target budget.
Compare lenders by comparison rate and fee model.
Validate eligibility and required documentation.
Proceed when total repayment and monthly fit both look sustainable.

Pros and cons

Pros

Simpler repayment management with one due date.
May improve cashflow organisation and budgeting visibility.
Can reduce interest burden in suitable cases.

Cons

Longer terms can increase total repayment.
Establishment and ongoing fees can reduce expected savings.
Behavioural risk if old revolving debt is rebuilt.

Alternatives

Targeted repayment strategy focused on highest-cost debt first.
Hardship arrangements where temporary relief is needed.
Secured or unsecured restructuring depending on risk tolerance.

Expert recommendation

Consolidation works best when paired with a clear debt reduction plan and spending controls. Use it as a structural reset, not just a short-term payment deferral. Credizen does not provide financial advice. Consider seeking independent financial advice for complex debt situations.

Important information

This information is general only and does not constitute financial advice. Credizen is a comparison service, not a lender. Read lender terms, Product Disclosure Statement, and related documents before making decisions.

Responsible lending obligations apply under the National Consumer Credit Protection Act 2009. For independent guidance, see ASIC MoneySmart. For unresolved disputes with financial firms, see AFCA.

See lender options

Start comparison flow

Read methodology

City guide: Brisbane · City guide: Perth