Debt consolidation
Lower complexity without hiding the long-term cost
Before combining debts, compare the total amount repaid, the new term, fees and the added risk of securing debt against your home.
Combining debts can simplify repayments and may reduce the immediate interest rate or required monthly outflow. It can also turn shorter unsecured debt into debt secured by a home and stretch repayment over many years, increasing total cost.
Loans West can assess credit options within its scope and show comparable scenarios. If you are in hardship or need a debt-management plan, free financial counselling or your lender's hardship team may be a more appropriate first step.
List every debt, cost and remaining term
A consolidation review needs current balances, rates, repayments, fees, payout amounts and remaining terms. Credit-card limits can affect lending assessment even where the balance is low.
The objective should be explicit: simplify administration, reduce total cost, improve cash flow or create a structured repayment path. Those goals can produce different solutions.
- Current payout amount for each debt
- Interest rate, fees, repayment and remaining term
- Whether the debt is secured or unsecured
- Planned treatment of repaid cards or facilities
Compare total repayment, not only the new rate
A home-loan rate may be lower than a personal-loan or credit-card rate, but repaying the amount over a much longer term can cost more overall. Include refinance fees and any costs of closing existing debts.
Compare at least one scenario that aims to repay the consolidated amount over a disciplined shorter period, subject to loan conditions and affordability.
Understand what becomes secured by the home
When unsecured debts are refinanced into a mortgage, the home secures the new lending. If repayments cannot be maintained, the consequences can be more serious. This risk deserves more weight than a short-term cash-flow improvement.
Plan what happens after payout
Consolidation does not address the cause of recurring debt. Decide whether paid-out facilities should be closed or limits reduced, create a workable budget and avoid relying on newly available credit without a plan.
A lender may make closure or reduction of facilities a condition of approval.
Seek hardship support early when needed
If repayments are already difficult, contact credit providers promptly and ask about hardship assistance. A free, confidential financial counsellor can help evaluate the wider debt position. A new loan is not always available or appropriate.
Frequently asked questions
Questions, answered clearly
General answers are a starting point. Your lending options depend on your circumstances.
Will debt consolidation save money?
Not necessarily. It depends on the new rate, fees, repayment amount and term compared with each existing debt. Extending a debt over a home-loan term can increase total interest even if the rate and monthly repayment are lower.
Can credit cards and personal loans be added to a mortgage?
A lender may permit a refinance or loan increase for approved debt consolidation, subject to serviceability, equity, purpose and policy. Approval is not guaranteed, and converting unsecured debt to secured debt increases the risk to the home.
Should I close cards after consolidating them?
A lender may require closure or limit reductions, and keeping unused limits can affect future borrowing and make repeat debt easier. The right action depends on your circumstances; include it in the plan before proceeding.
What if I am already struggling with repayments?
Contact your lender or credit provider's hardship team as early as possible. Free financial counsellors can provide independent, confidential support. Do not assume a refinance will be approved or will resolve the wider problem.
Ready to take the next step?
Talk through your goals with Luke and leave with a clearer idea of what comes next.