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Take back control with debt consolidation

Take back control with debt consolidation

What is debt consolidation?

This is the process of rolling all of your debts into one easy-to-manage personal loan. Debt consolidation can make budgeting easier because you’ll only have to worry about repayments on one debt, as opposed to multiple.  

Why would you consolidate your debts?

By combining different debts into one personal loan, you only need to manage one debt and one interest rate. If you have credit card debt, the interest rate of a personal loan is typically lower. This means you may pay less interest overall. 

 Another benefit of consolidating your debts is you’ll have a clearer picture of your financial future. Because a personal loan provides a clear timeline to becoming debt-free, which may also help to reduce stress. 

How long does it take to become debt-free?

This depends on your household budget and what you can afford. Choosing a longer loan term can mean paying less each month, which can reduce financial pressure. However, you may pay more in interest over the long term. 

On the other hand, choosing a shorter term loan means paying more each month, but you’ll pay off your debt faster. Also, you’ll pay less in total interest compared to a loan over a longer period of time. 

Consolidate my debts now

What are the steps to debt consolidation?

STEP 1: Work out how much you owe in total. 

STEP 2: Apply for a personal loan for this amount.  

STEP 3: If approved, the money is paid directly to each credit provider to clear your outstanding debts. 

STEP 4: Consider cancelling your old accounts to avoid running up further debt. For instance, credit cards, store cards etc. 

STEP 5: Pay off your personal loan over the agreed term. 

Comparing Plenti Personal Loans to major banks

Plenti has personal loans for debt consolidation that are very competitive when compared to the big banks.**

**Products shown do not represent all rates available from all lenders, or all rates available from the lenders presented. Plenti interest rate is based on a borrower with an excellent credit history using rates and fees applicable as at 15 February 2021. All other interest rates and fees displayed are as advertised by the respective lender on their website as at 15 February 2021 and may include short-term promotional offers. Comparison rates are calculated by Plenti. The actual product, rate, fees and charges you might be eligible for may be different based on your loan term, loan amount and credit characteristics.

Other fees and charges not shown here may apply. Rates shown are subject to change without notice. Information on this page does not constitute an offer of credit. Plenti Australia RE Limited does not provide credit assistance in relation to all products compared on this page. The displayed order of products shows the lowest monthly repayment as default or is based on your sorting options and does not represent a suggestion that a particular credit product is appropriate for you.

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This article was reviewed by Hernan Ferreyra before it was published as part of RateCity's Fact Check process.

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