Consolidate Credit Card Debt: Break Free from the Interest Trap
What Does It Mean to Consolidate Credit Card Debt?
Credit cards are convenient, but they are designed to keep you in debt. With interest rates often hovering around 20% to 25%, making only the minimum monthly repayment means you could be paying off a $5,000 balance for decades. To consolidate credit card debt is to take a strategic step off that treadmill.
It involves taking out a dedicated personal loan for debt consolidation to pay off all your outstanding credit card balances in one go. You effectively swap multiple high-interest debts for a single loan with a significantly lower interest rate and a fixed end date. Instead of your money vanishing into interest charges every month, it goes towards paying off the actual principal, clearing your debt faster and cheaper.
Key Benefits: Why Swap Plastic for a Personal Loan?
The math is simple: keeping debt on a credit card is expensive. Moving it to a fixed-term loan is smart.
Secure Low-Rate Debt Consolidation: The difference between a 22% credit card rate and a 10% personal loan rate is massive. On a $20,000 debt, this switch can save you thousands of dollars in pure interest over the life of the loan.
One Simple Repayment: Stop juggling five different due dates and risking late fees. Consolidating gives you one fixed monthly repayment to manage.
A Guaranteed Finish Line: Credit cards have no end date. A personal loan has a set term (e.g., 3 or 5 years). You know exactly when you will be debt-free.
Boost Your Credit Score: Maxed-out credit cards hurt your credit score because your “credit utilization” is high. Paying them to zero with a consolidation loan can improve your score over time.
Who Needs to Consolidate and Why?
This solution is perfect for anyone who feels like they are making payments but getting nowhere.
The “Minimum Payment” Payer: You pay the minimum amount every month, but the balance never seems to go down because interest eats it all.
The Multi-Card User: You have balances on a Store Card, a Rewards Card, and a Bank Card. Keeping track of them is a headache.
The High Earner with Old Debt: You earn good money now, but debt from your younger years is lingering. You qualify for a prime, low-interest loan and should use it to wipe the slate clean.
The Refinancer: You have a “Balance Transfer” card, but the 0% period is about to end, and the rate is about to jump to 21%. You need a permanent solution before that happens.
The Process: How to Wipe the Slate Clean
We make the switch seamless so you can stop worrying about interest rates.
Tally Your Balances: Check the “payout figure” on all your credit cards. Don’t forget store cards (like Zip or Harvey Norman).
Get a Low-Rate Quote: Use our platform to check your eligibility for a personal loan for debt consolidation. We look for a rate that offers significant savings compared to your current cards.
Apply Digitally: Submit your application online. We verify your income to ensure the new loan is affordable.
Pay Out the Cards: Once approved, the funds are deposited into your account. You transfer the money to your credit cards to bring the balances to $0.
Close the Accounts: This is the most important step. Close the credit card accounts so you aren’t tempted to run up the debt again!
Eligibility & Application: Can You Switch?
To qualify for low-rate debt consolidation, lenders want to see that you are moving to a better financial position.
Regular Income: You must be employed or self-employed with steady income to cover the new loan repayments.
Credit History: To get the absolute lowest rates, a good credit score helps. However, we also have lenders who help those with average credit to consolidate, as long as it puts them in a better position than they are currently.
Serviceability: Lenders check that you have enough surplus cash each month to afford the loan.
Residency: Australian Citizen or Permanent Resident.
Stop Paying the Bank's Profits
Every month you leave money on a high-interest credit card, you are paying a “lazy tax.” Take control of your financial future today. By choosing to consolidate credit card debt, you are choosing a debt-free future. Check your new rate now and see how much you could save each month.
Top 5 Relevant FAQs Consolidate credit card debt
Is a personal loan better than a Balance Transfer credit card?
It depends on your discipline and the size of the debt. A Balance Transfer (BT) card offers 0% interest for a short time (e.g., 12-18 months). If you can aggressively pay off the entire debt in that time, a BT card is cheaper. However, if you can't clear it in time, the rate shoots back up to 20%+. A personal loan for debt consolidation offers stability with a fixed rate for the full term (e.g., 5 years), making it safer for larger debts that take longer to pay off.
Will consolidating improve my credit score?
Long-term, yes. "Credit Utilization" (how much of your limit you are using) is a major factor in credit scoring. Having multiple maxed-out cards looks bad to lenders. Paying them all off with a single installment loan lowers your utilization and shows you are managing debt responsibly. Just make sure you make the new loan repayments on time!
Can I keep my credit cards open after I pay them off?
You can, but it is risky. Many lenders will make it a condition of the loan that you must close the cards to prevent you from spending on them again (ending up with double the debt). Even if not required, we strongly recommend closing all but one card (for emergencies) to remove the temptation.
How much can I borrow to consolidate?
Unsecured personal loans typically range from $5,000 to $50,000. If your credit card debt is higher than this (e.g., $80,000), you may need a Secured Loan (using your car or equity in your home) to access the higher limit needed to clear all the cards.
What if I have bad credit?
You can still consolidate. While you might not get the lowest "prime" interest rate, specialist lenders offer consolidation loans for bad credit. Even if the rate is 14% or 16%, it is still likely better than the 24% or 29% charged by some credit cards and payday lenders, making it a smart financial move.