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Debt Consolidation Loan Comparison Rate? Nifty Explains.

Debt consolidation loan comparison may seem confusing to a lot of us, but it really doesn’t need to be. In a nutshell, a debt consolidation loan comparison rate lets you compare different consolidation loans, and to get an idea of the total cost of the loan. Don’t worry, we’ll explain all of this in more depth. Learn more about how you could get a speedy loan today!

Debt Consolidation Loan Comparison

What Is A Comparison Rate?

A comparison rate is a percentage figure that lets borrowers compare the costs of different loan products more easily. In other words, a comparison rate reduces the interest rate plus most of the fees and charges on a loan, down to a single percentage figure. Comparison rates are an easy way to weigh up different loan products.

Be aware, however, that comparison rates may not be representative of all the fees and charges on a loan. They are, essentially, just a rough guide to what you could expect to pay on your loan.

What Is A Debt Consolidation Loan?

A debt consolidation loan is, simply, a loan that pays off all your other existing debts. Then, you will only have one, regular repayment to make, instead of multiple. Debt consolidation loans are a great way to reduce stress, make your budget more manageable, and even potentially save on your interest rate and fees.

Let’s put it another way. Let’s say, you have five existing debts on a variety of personal loans and credit cards. So, this means every month, you have five different repayments to remember on five different days. Now, we don’t know about you, but just the thought of that is stressing us out. What, then, is one to do?

Well, you could take out a debt consolidation loan, that will settle these other five debts. So, you pay out these other five debts early, and now you just have one repayment on the debt consolidation loan to make, every month. Pretty easy, right?

Debt Consolidation Comparison Rate

For a lot of people, searching online for different loans can get incredibly confusing. Especially when you start sorting through tables upon tables of different fees, charges and percentages. So, if you’re not particularly familiar with this type of financial jargon, it can be really difficult to know where you stand.

Luckily, things are made a little easier for us, with comparison rates. Put simply, a comparison rate reduces the interest rate plus most fees and charges relating to a loan to a single percentage figure. Essentially, the comparison rate allows you to get an idea of how much your loan will cost.

It is, however, also important to explore what features each loan offers, and how important these are for you. So, while comparison rates definitely take a lot of the hard work out of comparing loans, they aren’t the only thing to consider when you’re looking for a loan.

Is It A Good Idea To Get A Debt Consolidation Loan?

Well, this depends both on your personal and financial situation. In some cases, it may be cheaper for a borrower to settle their existing debts with a consolidation loan, as they may save on their overall fees and charges. There are, however, a few things you should consider before you start looking around and doing a debt consolidation loan comparison:

Affordability

Always confirm that your consolidation loan will be cheaper to pay off than your existing debts. Additionally, make sure that you will be consistently able to afford the repayments on your new loan, to avoid going further into debt.

Early Repayment Costs

Some loans will require you to pay additional fees or charges if you wish to pay your loan off early. Always include early repayment fees and charges in your debt consolidation loan comparison. In short, if you are keen to pay your loan out early, make sure that even with these additional fees, debt consolidation is the right choice for you.

Legitimacy

Before you do a debt consolidation loan comparison on different lenders, make sure they are all licensed by ASIC, and legally allowed to operate in Australia.

Financial Advice

Due to the complex nature of debt consolidation loans, it is always a good idea to seek further advice. You should always consider independent legal and financial advice before taking out debt consolidation loan, who can help you find out if it is right for you.

Where Can I Find A Debt Consolidation Comparison Calculator?

Some consolidation loan providers will include a debt consolidation comparison calculator on their website. Essentially, you enter the details of your existing repayments, and they will calculate how much you may save.

Again, some lenders will have calculator tools on their websites. Otherwise, you may be able to go into a lender’s branch and ask them to go through a debt consolidation comparison with you.

Personal Loan Debt Consolidation Comparison

Do you have multiple personal loan debts that you are struggling to keep track of? Well, you could consider doing a personal loan debt consolidation comparison. You may find it cheaper to consolidate your existing personal loan debts, into one, more manageable debt.

These days, you are able to search for lenders and do a debt consolidation comparison online. Therefore, you could do this from the comfort of your home, on the weekend, or even on your smartphone.

How To Use A Debt Consolidation Loan Comparison

It can be difficult to compare various consolidation loans that have different interest rates and fees. This is why credit providers must give a debt consolidation loan comparison rate when they advertise their loans.

Looking for Debt Consolidation Loans?AmountNifty Approves
Debt Consolidation Loans NowAUD ($)2,100
Personal Loan Debt Consolidation Loan TodayAUD ($)2,200
Fast Debt Consolidation LoansAUD ($)4,000

Disclaimer: The above examples are for demonstrative purposes only. They do not, in any way, reflect the terms of your possible loan, or the amount you may be approved for.

How To Make A Consolidation Loan Work For You

Debt consolidation loans can, in certain situations, really ease the burden on your finances. Additionally, having more manageable repayments can ease stress, and allow you to focus on other aspects of your life.

So, to get the most out of your consolidation loan, and get your finances back on track, it may be a good idea to:

  • Set up a budget to effectively manage repayments;
  • Learn financial planning skills (finder.com has a free financial bootcamp);
  • Make extra repayments to pay your loan off earlier;
  • Find ways to cut down on expenditure;
  • Do research, and conduct a debt consolidation loan comparison.

Consolidation Loan Pros And Cons

Consolidation loans may be helpful in certain situations, however, they may not suit everybody. There both benefits and drawbacks to consolidation loans:

Pros

  • Easy repayments: Consolidating your existing loans will make repayments much simpler. Instead of having to be aware of multiple repayments, you will now only have to manage one. Additionally, most lenders will conduct direct debit transfers from your account. Once you have settled your consolidation loan, the direct debits should automatically cease.
  • Reduce overall payments and costs: Consolidation loans may reduce what you pay overall in fees and costs.
  • Reduce stress: Consolidating your loan will reduce the number of phone calls you may be received from debt collectors and lenders chasing up repayments.

Cons

  • May increase debt: If you fail to make repayments on your consolidation loan, you may incur additional fees and charges. These have the potential to snowball and increase your overall debt.
  • May be charged exit fees: You may be charged early exit fees when you settle your existing debts.

Take Home Message

The take home message is that there are many pros and cons of consolidation loans. If one is right for you or not will depend on many different factors and circumstances. As we have said earlier, we would always recommend seeking legal or financial advice.

Can I Apply For A Debt Consolidation Loan If I Receive Centrelink?

If you’re thinking of conducting a debt consolidation loan comparison on different lenders, you may be concerned Centrelink benefits will stand in your way. However, some lenders will class regular Centrelink payments as a form of income.

To find out if a credit provider will accept Centrelink as a form of income, you will need to get in contact with them directly.

Should I Apply For A Debt Consolidation Loan With My Current Credit Provider?

If your current credit provider provides debt consolidation loans, there are indeed some advantages. For instance, they may be more willing to accept your current application, as you are an existing customer.

They may, however, not be able to offer you the best deal. It is potentially a good idea to explore your other options before agreeing to anything.

Can I Consolidate More Than One Credit Card?

In short, yes. Most lenders will offer loans to consolidate multiple credit card debts. This may, in the long run, allow you to pay less interest and have lower repayments. You will, however, need to consult the lender directly.

Does Nifty Offer Debt Consolidation Loans?

Nifty can offer personal loans ranging from $300 to $5,000, that can be used to consolidate debts.

It may only take a few minutes to apply for a Nifty personal loan, provided you have all relevant information at hand. If you complete your application during normal business hours, we will try to get a response back to you within 60-minutes of applying. Next, provided your application has been approved, you will receive a loan agreement. Once you have read through your loan agreement, and agree to the terms and conditions, sign and send it back.

Depending on when you send back your signed loan agreement, you could have the money in your account within 24-hours of approving the contract. Access to funds, however, is dependant on inter-bank transfer times.

If you have any questions regarding a Nifty personal loan, send us an email via the form on the contact us page. Alternatively, you can visit our FAQ section, or could give us a call directly on 1300 471 328.

Follow our Nifty blog for more information and helpful finance and lifestyle tips.

Find out how you could get a debt consolidation loan, truck loan, travel loan or even a loan for an airconditioner!

 

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Andrew Bell

Since founding Nifty in 2016, Bell has continued to make waves within the local financial sector for his continued ambition and willingness to adopt emerging technologies.

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Loan Costs

Large Loans

Large Loans

Large Loan Example

$5,000

Loan amount:
$5,000
Terms:
9 - 24 months
Establishment fee:
Variable
Monthly Fee:
$0
APR:
21.24%
Comparison Rate:
48%**
View Example
Loan amounts:
$5,000
Terms:
18 months, (78 weekly repayments)
EEstablishment fee and Total Interest:
$1,897.54
Total payable:
$6,897.54
Weekly installments:
$88.43
View Loan Details
Medium Loans

Medium Loans

Medium Loan Example

$2,001 - $4,600

Loan amounts:
$2,001 - $4,600
Terms:
9 - 24 months
Establishment fee:
$400
Monthly Fee:
$0
APR:
47.8%
Comparison Rate:
65.86%**
View Example
Loan amounts:
$2,500
Terms:
24 Months, (104 weekly repayments)
EEstablishment fee:
$400
Total other fees:
$1,609.44 (reducing interest)
Total payable:
$4,509.44
Weekly installments:
$43.36
View Loan Details
Small Loans

Small Loans

Small Loan Example

$300 - $2,000

Loan amounts:
$300 - $2,000
Terms:
6 - 9 months
Establishment fee:
20%
Monthly Fee:
4%
APR:
N / A *
Comparison Rate:
138.37%**
View Example
Loan amount:
$1,000
Terms:
6 Months, (24 weekly repayments
EEstablishment fee:
$200
Total other fees:
$240
Total payable:
$1,440
Weekly installments:
$60
View Loan Details

* Not applicable. Small loans do not charge an annual interest rate.

** WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Different loans may include other payable fees and charges. All fees and charges will always be displayed on your loan contract.