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s WARNING: Do you really need a loan today?*

It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.


Check your options before you borrow:

  • For information about other options for managing bills and debts, call 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor.
  • Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan.
  • If you are on government benefits, ask if you can receive an advance from Centrelink: www.humanservices.gov.au/advancepayments

The Australian Government’s MoneySmart website shows you how small amount loans work and suggests other options that may help you.

*This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009

What are debt consolidation loans?

Debt consolidation loans are loans that combine all of your debts and refinance them into one loan.

Debt consolidation loans can save you money by enabling you to combine your loans therefore only paying one repayment and one lot of interest on your loan. This can save you money each month on your repayments.

Why are debt consolidation loans a good idea?

  1. Easier repayment plans!

Having all of your debts consolidated into one can help you have once clear repayment each week or month instead of multiple repayments.

  1. One manageable debt:

Having multiple debts and loans can be very overwhelming and many people will find themselves drowning in debt because they aren’t even managing to pay out all of the interest on their loans let alone the principle.

Rolling all of your debt into one helps streamline the process to make your repayments more manageable.

What is a debt agreement?

A formal debt agreement:

A formal debt agreement is an agreement whereby your debtors agree to allow you to pay an affordable amount off your debts to settle your debt over a period of time.

You will have to meet requirements to be eligible for a debt agreement.

  • You must be earning under $1,580 per week.
  • Your debts may not exceed $109,473 if they are unsecured.
  • You cannot have been in a previous bankruptcy or debt agreement in the last ten years.
  • Your debts must be at least $8,000.

debt consolidation loans

What is an informal debt agreement?

An informal debt agreement helps you to negotiate your debts to a more affordable repayment that you can afford while avoiding having to declare bankruptcy.

When using an informal agreement you can request to have your interest and charges frozen. If the lenders agree that means all money that you pay will be reducing the principle on your debt.

How will it affect my credit rating?

Entering into a debt agreement will effect your ability to borrow any more money while you are still in the debt agreement.

However, it will not leave a lasting mark on your credit file. If you address the issue before you miss any repayments there is a chance you will be able to keep your credit rating from any damage.

Also with an informal agreement you have the chance to pay off your debts early if you are able to.

There is also no requirements or limitations on your income, assets or employment status like the formal debt agreement.

Therefore, when it comes to choosing between how to solve your debt problems, if it can be managed debt consolidation is by far the best choice.

Using your assets to help you reduce your unsecured debts can save you even more in interest and fees.

You will most definitely get a better deal when you roll your unsecured debts into your home loan as the interest rates on a home loan are significantly lower than that of a credit card or personal loan.

To be eligible for a debt consolidation loan into your home loan you need to owe less than 80% of the properties value on your loan. You also need to be have equity in your home loan mortgage (which is the difference between how much you owe and how much your property is worth.

You also must be earning an income and be able to afford the repayments.