​Is a debt consolidation loan right for you?

Midcoast Financial Planning • September 12, 2023

What’s a debt consolidation loan?

A debt consolidation loan is a way to combine all your debts – credit card, personal loans, store card etc. – into one loan so you’ll be making repayments in one place.


It means that you can take a breath and take back some control. It also means no multiple annual fees, and one regular repayment, with one interest rate.


Interested to know what it could look like for you? A debt consolidation calculator is a fantastic tool that can show you how much your minimum repayments – and monthly interest – can change.

Benefits of debt consolidation

Having one debt consolidation loan usually outweighs the benefits of having a heap of little debts.


  • One loan’s much easier to manage than multiple loans or cards across multiple providers – just one recurring repayment, with a single interest rate.
  • One loan means setting up a repayment plan is easy. You’ll have greater control of your budget, and you’ll have a better idea of when you’ll be debt free.
  • Having one, easy-to-manage debt is a good way to improve your credit rating.
  • It can save you money, either by having less interest or fewer fees to pay (or both).1

Things to consider

While there are several benefits to consolidating your debt, there’s a few things that you should keep in mind.



  • If you switch to a loan with a longer term, even if the interest rate is lower, you may end up paying more in interest and fees.
  • Paying off your debt quickly is important but having a budget you can manage and stick to is as well.
  • Consider having your repayments due right after your pay day to help manage your budget and give you peace of mind.

How do I consolidate my debts?

While it’s a straightforward process, you should do some homework before you apply.


  1. Note down the amount owed, current repayment, and repayment frequency of each debt.
  2. Use this debt consolidation calculator to see how much your new loan repayment may change for different loan terms and repayment periods.
  3. Consider taking out a new personal loan to combine the debt you currently have.
  4. Once you’ve consolidated your debts, this is the time to review your finances and get on top of them.


Feel free to contact us if you have any questions.


1 For the loan purpose of debt consolidation or refinance, to ensure this product meets your needs and objectives, please visit your nearest NAB branch if you intend to use the funds:



  • to free up some cash by reducing the amount of regular debt repayments
  • to take advantage of a good deal with our lower rate and/or fees.


Source: NAB


Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/manage-money/manage-debt/consolidation


National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.


© 2023 National Australia Bank Limited (“”NAB””). All rights reserved.


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