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Feeling overwhelmed by juggling credit cards, car loans, BNPL and even store finance? Debt consolidation via a personal loan can simplify life and potentially save you money in Perth. But does it deliver?
What Is Debt Consolidation?
It means combining multiple high-interest debts into a single personal loan with a fixed rate and repayment schedule. By rolling everything into one, you deal with just one repayment instead of several.
Why Australians Consolidate Debt
- Over 50% of personal loan applications in Australia are for debt consolidation, with an average loan around AU $15,300.
- Faced with high living costs, many Aussies consolidate high-rate credit into a personal loan to ease cash flow pressure.
Benefits: What It Can Deliver
- Lower interest rates: Many credit cards charge over 20% p.a., while debt consolidation loans can start around 7–8% p.a.
- Simplified finances: One repayment, one due date, one rate to worry about.
- Faster payoff timeline: With regular extra repayments, a set term loan helps eliminate debt sooner.
- Credit improvement potential: Consolidating multiple accounts into one can streamline your profile and reduce delinquencies.
Things to Consider (Before Signing)
- Total cost: A longer loan term, even at lower interest, can add up to more interest over time.
- Upfront fees: Watch for application, establishment or early payout fees on your current debts.
- Spending discipline: Consolidation fails if you continue using credit cards after closing them.
Is Debt Consolidation Right for You?
It may help if you:
- Are managing multiple high-rate debts (eg. credit cards, BNPL, store cards).
- Want more control and clarity in your finances.
- Can commit to a realistic repayment plan and close old credit accounts.
When done right, consolidation can give you more breathing room and potentially save thousands every year.
Final Thoughts for Perth Borrowers
A well-structured consolidation loan can turn financial chaos into clarity. For residents in Perth, a local finance broker can help assess your exact interest rates and structure a plan that suits your income and budget. Consolidation isn’t magic, but it can be an effective tool if wielded carefully.
