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Viva Payday Loans > Debt Consolidation Loans

Debt Consolidation Loans

If you have multiple different lenders to maintain each month, a debt consolidation may be a suitable option to merge the total debt into one manageable repayment. Offered by financial service providers in Australia, borrowers can apply with multiple outstanding loans/debt products through us for an amount up to $5,000. Simple and easy to apply for, just tell us how much you need to borrow and how long for using our loan calculator above, and click apply now to start your application. We’ll then find suitable debt consolidation loans in Australia that match your circumstances, even if you have bad credit.

What is a Debt Consolidation Loan?

A debt consolidation loan allows borrowers to ease the burden of managing multiple debt products by taking out a loan amount to cover their total debt. This allows successful applicants to repay the total amount they owe through a single loan product instead, providing a more manageable monthly repayment. Depending on the amount of the total debt needing to be covered, the best debt consolidation loans can sometimes reduce the monthly repayment amount an applicant needs to pay, helping to ease any financial strain caused by mounting debt.

Debt Consolidation Loans for Bad Credit Example:

You have an existing credit card debt worth $5,000 and another $3,000 owed on a car loan that was taken out four years earlier. If say you are paying 19.99% per annum in interest on your credit card debt and 9.1% p.a on your car loan, you could then look to consolidate both of these loans together.

A debt consolidation loan of $8,500 with an interest rate of 7.7% p.a would repay both of the loans including any charges incurred on early repayment. By doing this, you would now have only one loan of $8,500 to repay at the rate of 7.7% per year, which is much simpler than managing two loans with different rates, terms, and conditions.

*Warning: These rates are true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different rate.

Considerations Before Choosing Debt Consolidation Loans in Australia

If you are planning to consolidate your debts by taking out this form of personal loan, there are a few things to consider before applying. 

Your Affordability

If you are finding it difficult to repay your existing debt, ensuring that the debt consolidation loan will not be more expensive to repay than your current arrangements may be of importance. The repayments should be affordable considering your regular income, as failing to make the due repayments on debt consolidation loans can lead you into further financial difficulty.

Early Repayment Charge

Consolidating your debt may require you to repay your existing loans earlier than their stipulated loan term, which could result in early repayment charges (depending upon the lender). If that’s the case, you may want to consider incorporating these costs into your debt consolidation loan to evaluate if this would be too expensive for you.

The Legitimacy of the Lender

You should always make sure the lender you choose for debt consolidation loans has been fully licensed by the ASIC to operate in Australia. The last thing you want to do is choose a lender that is not a trusted source. By using our online loan finder service at Viva Payday Loans, we can help you find suitable, authorised lenders of the best debt consolidation loans available. As a loan-finder service, we work with a panel of authorised lenders, who consider all types of credit history.

Advantages and Disadvantages Of Debt Consolidation Loans

AdvantagesDisadvantages
Simplifies your repayments into a single paymentYour overall outstanding debt may increase due to early repayment costs 
You can potentially reduce your outstanding debt and interest expenseFailing to repay the consolidated debt may result in more debt
If you are falling behind on one of your existing loans, you will get back on track

The Process of Applying for a Debt Consolidation Loan

Here at Viva Payday Loans, we can help those in need of debt consolidation loans in Australia find the right lenders to do so. While we do not lend money directly to applicants and have no control over the decision the lender makes on application, we will consider all areas of your application to help match you to the most appropriate lender for your needs. To do this effectively, you need to follow this process:

  1. Calculate the total debt consolidation loan amount you require to completely pay off all existing loans (or loans you wish to consolidate), including any charges and fees you would incur by paying them off early.
  2. Conduct thorough research on debt consolidation loans in Australia and find one that is most suitable for you. This loan should:
  • Offer the amount you require.
  • Have a repayment term period and schedule that suits your affordability.
  • Charge an interest rate that is equivalent to or lower than the total interest expense you were paying on your debt that will be consolidated.
  • Be offered by a lender that allows personal loans to be used for debt consolidation purposes.

3. Once you have selected a suitable debt consolidation loan, apply for it. If approved, you will receive the funds into your bank account quickly.

4. Use these funds to repay your debt, including all fees and charges that are incurred for early repayment.

5. Repay the new debt consolidation loan at the agreed-upon rates, terms, and conditions.

Other Options for Debt Consolidation Loans

Apart from a personal loan, you may be able to consolidate your debt with the following debt products instead if you are not successful.

Balance Transfer Credit Card

In Australia, some credit card providers offer balance transfer credit cards that allow borrowers to transfer their personal loan balance onto their credit card. Such cards may come with a promotional time period during which borrowers are charged a 0% rate on their debt. After the expiration of this promotional period, a standard rate, usually 20% per annum, is applied to the outstanding amount.

This option may be suitable if you believe you can repay the total amount during the stipulated promotional period, as you would save a lot on interest expenses.

Refinancing On Mortgage

You may be able to consolidate your debt by transferring the amount onto an existing mortgage. However, this option should be carefully evaluated as it could end up costing a lot more in interest rate expense over time, even though the applicable mortgage rate on home loans may seem too cheap.

Also, some mortgage lenders may also not allow their customers to exercise this option. But, for some borrowers, consolidating their debt into an existing mortgage loan may result in savings in the long run.

Find the Best Debt Consolidation Loans Online

Reducing your monthly repayments by choosing debt consolidation loans can be the ideal solution. We can help you find a loan up to $5,000 with a maximum term of 24 months from our panel of 15+ lenders, all willing to help you today.

Have any questions about debt consolidation loans for bad credit? Get in touch with us today for further information, and click apply now to see which lender offers are available.

Debt Consolidation Loans for Bad Credit FAQs

Can I Get Debt Consolidation Loans With Bad Credit?

Yes, some lenders are willing to offer debt consolidation loans to borrowers with a bad credit score as long as you have the affordability. While lenders that we work with may require a credit check as part of the decision-making process, we work with a wide range of lenders who will consider any type of credit history.

Should I Choose a Debt Consolidation Loan Offered by my Bank?

Since you already maintain an existing relationship with your bank, you have a higher chance of being approved for debt consolidation loans. However, your bank might not offer you the best rate or terms available on the market. Hence, it is always better to compare multiple products before you choose a financial service provider to consolidate existing debt. At Viva Payday Loans, we make the loan finding process simple.

Can I Get a Debt Consolidation Loan For Multiple Credit Cards?

Yes, in fact, you have a good chance of reducing your total interest expense if you consolidate debt accumulated on multiple credit cards into a single loan product. If you need debt consolidation loans for bad credit caused by credit cards, then our panel of lenders may be able to help.

Who Do I Contact If I’m Concerned About My Debt & Need Help?

If you require support during financial difficulties, you can always get in touch with a free financial counselor by calling the National Debt Helpline at 1800 007 007. You can also visit MoneySmart.gov.au for additional support.

Here at Viva Payday Loans, our panel of lenders is extensive, meaning we can provide you with financial assistance quickly. While we do not lend money directly ourselves, our panel of lenders may be able to provide you with the cash you need on the same day, even within 60 minutes if your application is approved and your bank accepts faster payments. Apply online for a debt consolidation loan through Viva Payday Loans, today.