Multiple debts stacking up? Let’s see if consolidation is actually the right move.

Your three realistic options — explained

Option 1 — Consolidate into your home loan. If you own property and have equity, rolling unsecured debts into a mortgage top-up or refinance moves them from 18–22% p.a. rates down to mortgage rates (roughly 5–7% p.a. in 2026). The trade-off: the debt is now secured against your home and stretches over the remaining mortgage term. To actually save money, you need to keep repayments higher than the new minimum so the consolidated portion clears in years, not decades. Pepper Money and similar non-bank lenders allow consolidation even with impaired credit; major banks are tighter but cheaper. We map which lender suits which story.

Option 2 — Standalone debt-consolidation personal loan. A fixed-term (usually 1–7 years) personal loan at 6–15% p.a. is a cleaner ring-fence of the debt — you see a finish line. It suits renters, people with little home equity, or homeowners who want to avoid securing short-term debt against property. Rates are higher than a mortgage but the repayment schedule forces you to finish. NAB, ING, Plenti, MoneyMe and others compete hard in this space; comparison rates matter more than headline rates because fees are real.

Option 3 — Balance transfer + targeted attack. If your debt is mostly credit-card and you have a reasonable credit score, a 0% balance-transfer card (typical promotional periods: 12–28 months) can give you breathing room to attack the principal at zero interest — provided you (a) stop spending on it and (b) clear it before the promo expires or the revert rate (often 20%+) kicks in. Not for the disorganised. This can sit alongside calling your existing lenders to request hardship or rate reductions — free, and often overlooked.

What you can (and cannot) consolidate

**Usually consolidatable:** credit cards, store cards, personal loans, car loans, buy-now-pay-later balances, line-of-credit overdrafts, small ATO tax debts (case-by-case), and other consumer debts. **Generally not consolidatable into a home loan:** HECS/HELP debt (it is a statutory obligation, not ordinary credit — see our HECS blog for how it affects borrowing power), active bankruptcy or Part IX debt agreements, business loans for entirely separate entities (though there are commercial alternatives), and unverified informal debts. If you’re not sure which bucket your debt falls into, bring the latest statement — we’ll tell you in the first conversation.

Tax debts deserve a special note: the ATO is increasingly flagging overdue business activity statement (BAS) liabilities to credit bureaus since 2023. If you’re sitting on an ATO debt, consolidating it into a home loan can sometimes be the cleanest path — but lender appetite varies widely and timing matters. Speak to your accountant first; we’ll handle the credit side.

Warning signs to walk away from (ASIC MoneySmart guidance)

ASIC’s MoneySmart is explicit: some "debt management" or "debt solution" companies advertise that they can clear any debt regardless of how much you owe. That is unrealistic. Walk away from any provider who is not licensed (check ASIC’s professional register for a Credit Licensee or Credit Representative number), asks you to sign blank documents, refuses to discuss repayments, rushes the transaction, or will not put all loan costs and the interest rate in writing before you sign. A working broker will do all of those as standard.

Bishnu Adhikari holds credit representative number 538895 under Australian Credit Licence 390261 — no upfront fees charged to you for standard residential debt-consolidation strategy and mortgage credit assistance. Commissions paid by lenders are disclosed in your credit proposal before you sign anything.

If debt is causing genuine hardship, free help exists first

Consolidation is a product conversation. If you are behind on repayments, receiving hardship notices, or the stress is affecting your health, the right first call is the **National Debt Helpline on 1800 007 007** — free, independent, not-for-profit financial counsellors who will sit with you at no cost and help you negotiate with every creditor. We will happily refer you there if that is what your situation calls for, and pick up the lending conversation once you are back on steady ground.

Every major Australian lender also has a dedicated hardship team — they can pause, reduce, or restructure repayments, and contacting them does not, on its own, damage your credit file.

Licensed broking

General information on this page is not personal credit or financial product advice. Credit assistance is subject to lender assessment, policy, and verification — outcomes are not guaranteed.