Consolidate credit card debt and save money on interest | Finder NZ

Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.

Compare credit card debt consolidation loans

Want to save money on interest while paying off your credit card debt? Consider a credit card debt consolidation loan.

Credit cards, while convenient, make it easy to get into and stay in debt. You may be able to reduce the interest and fees you’re paying across multiple credit cards by consolidating them into one account.

There are a few ways you can do this including a balance transfer, a debt consolidation loan, a personal loan or a peer-to-peer loan. You can learn more about your options in the guide below and decide which one is right for you.

How does credit card consolidation work?

Credit card debt consolidation combines your outstanding balances on your credit cards into one monthly payment. The benefit is that you’ll pay off your existing debts with those credit card companies and have a simplified payment process with just one lender. You could possibly save on interest payments too, since credit cards tend to come with higher interest rates than personal loans do.

Credit card consolidation could improve or hurt your credit depending on how you use it. Falling behind and making late payments on your credit cards may have damaged your credit, but consolidating them to one monthly payment could raise your credit score as your payment history improves. On the other hand, taking on a new loan, in general, could cause a short-term drop in your credit score because of the hard inquiry.

Compare personal loans for credit card consolidation

Data updated regularly
Name Product Interest Rate (p.a.) Min. Loan Amount Max. Loan Amount Loan Term Monthly Service Fee Establishment Fee
The Lending People Personal Loan
6.95% - 26.95%
1 to 7 years
$0 - $10 depending on lender
$50 - $695 depending on lender
Eligibility: Be 18+, an NZ citizen or permanent resident, in employment and earning at least $500 per week.
Secured and unsecured loans of up to $75,000 from a variety of reputable lenders.
Max Loans Secured Personal Loan
6.99% - 29.95%
1 - 7 years
$0 to $10 depending on lender
$195 to $1,500 depending on lender
Eligibility: Be 18+, an NZ citizen/permanent resident, and have an income of least $400 per week.
Harmoney Unsecured Personal Loan
6.99% - 24.69%
3 or 5 years
$200-$350 depending on loan size
Eligibility: Be a NZ resident/citizen and have a good credit score.
Apply for an unsecured personal loan up to $70,000 with no early repayment fees.
Kiwibank Unsecured Personal Loan
6 months to 7 years
$240, $0 for Graduate Pack customers
Eligibility: Be 18+, an NZ citizen/permanent resident, and have a stable income. Ts&Cs apply.
Unsecured personal loans from $10,000.
Gem Secured Low Rate Personal Loan
6 months to 7 years
Eligibility: Be 18+, a permanent NZ resident and earning a stable income.
Secured, low-rate personal loans for those with an excellent credit history. Weekly, fortnightly or monthly repayment schedules and no fees for early repayment.
Lending Crowd Personal Loan
5.03% -19.30%
2, 3 or 5 years
$200-$1,450 depending on the amount borrowed
Eligibility: Be an 18+ NZ permanent resident, have a good credit history and collateral/security.
Secured and unsecured personal loans from $2,000 to $200,000. 100% online with no paperwork or early repayment fees.
Max Loans Unsecured Personal Loan
6.99% - 29.95%
1 - 7 years
$0 to $10 depending on lender
$195 to $995 depending on lender
Eligibility: Be 18+, an NZ citizen/permanent resident, and have an income of least $400 per week.
Nectar Unsecured Personal Loan
8.95% - 29.95%
6 months to 4 years
Eligibility: Must be 18+, an NZ citizen or permanent resident, have an income of $400 per week or more (after tax) and a stable credit history.
Unsecured loans from $1,000 with payouts made within one day of approval. Applications entirely online.
Save My Bacon Unsecured Flex Loan
8 - 52 weeks
Eligibility: Be 18 or over, have an income of at least $400 per week and be a NZ citizen, permanent resident or have a valid work visa.
Medium-term unsecured loans from $1,000 to $5,000 with no hidden fees.

Compare up to 4 providers

Credit card consolidation case study

credit card consolidation case study image

What are your options for credit card consolidation?

  • Credit card balance transfer. Card providers usually offer 0% APR for a limited period of time, allowing you to pay off your debt. Keep in mind the 0% APR is only applicable to the balance you transfer. Any new purchases or cash advances will be charged at the standard interest rate.
  • Debt consolidation personal loan. You can take out a larger debt consolidation personal loan and pay off your credit card balances using the funds. Some lenders also give you the option of paying your creditors directly rather than you having to divvy up the funds yourself.
  • Peer-to-peer loans. Also referred to as P2P loans, these are becoming a popular choice for people looking to pay off their credit cards. Apply for a loan online and it will be funded by one or more “peer” investors.
  • Debt consolidation companies. These companies work by negotiating with your credit card providers to reduce your interest rate or lower your monthly repayments. You make a single payment and the debt consolidation company will distribute the payment across your card accounts.
Back to top

How can I decide which is the best consolidation method for me?

  • What’s your credit score? Whether or not you have good credit will affect the interest rate you’re offered by lenders as well as your chances of being approved. Make sure the rate you’re given will save you money when you consolidate your credit card debt.
  • How much debt do you have? The amount of debt you have may affect the credit you can apply for. Check the allowable limits on different accounts before you apply to ensure you can consolidate all of your debt. Other lenders may not be willing to take on your debt if it’s too large, so take this into consideration as well.
  • Do you want fixed repayments or would you prefer flexibility? Different consolidation methods offer different ways to repay. For example, if you opt for a P2P loan your payments will be fixed, whereas you can make variable payments and pay off more than you owe with a credit card.

Balance transfer credit card vs debt consolidation loan

A debt consolidation loan and a balance transfer credit card are similar in purpose, but there are some key differences. The most obvious is that a loan generally has equal monthly payments while a balance transfer credit card has variable payments based on a percent of the balance owed.

Balance transfer credit cards are used to transfer one or more high-interest amounts from a different provider. Typically these credit cards have promotional periods that generally last for 6 to 12 months and offer low or 0% APR. A balance transfer credit card’s usefulness is on a relatively tight timeline. After the promo period is up the APR reverts to the standard purchase rate, which can be 20% or more.

Debt consolidation loans are also used to shift debt away from high-APR credit cards. Rather than taking advantage of a short-term promotional period, these are likely to have a lower APR than the non-promotional rate of a balance transfer credit card. A loan may be better when you want to pay your debt off over a longer period of time.

How can I find the best credit card consolidation loan?

First, get a ballpark idea of how much you need to borrow by adding up your credit card balances. Many lenders have limits to how much debt they’re willing to consolidate, so knowing this ahead of time can help you find a lender that offers what you need.

To find the best deal available to you, shop around — you can get started by using our comparison table. Take into consideration features like the minimum and maximum loan amounts, APR range, fees and turnaround time before you apply. You might want to also take a look at online reviews from vetted sites to look out for any red flags.

Once you’ve narrowed it down to a few choices, consider prequalifying with a few lenders to see which can offer you the best deal. Your rates and terms might not be exactly what you’d get with the lender, but it’s more specific than a general range of loan amounts.

How to avoid scams

  • Research. Make sure the lender is accredited and licensed to do business. Licence numbers should be visible in the footer of the website and in the Terms and Conditions.
  • Stay away from “guaranteed approval”. Lenders can’t guarantee that you will qualify for a loan without knowing your particular situation and personal information.
  • No upfront fees. Be wary of having to pay any fees to apply for a debt consolidation loan, you should never have to with a legitimate lender.
  • Take note of initial contact. You should always be the one to initiate contact, unreliable lenders are more likely to be insistent in their search for borrowers.
  • Beware of companies claiming to offer loan debt consolidation. Many of the companies that advertise this way instead offer debt management and settlement services.

When should I hold off on consolidation?

Consolidating your credit card debt isn’t always the right move. Consolidate at the wrong time and you could actually lose money. You might want to hold off on consolidating or consider other options when:

  • You qualify for a higher APR. This is a red flag that your personal finances are not strong enough to handle a new loan, even if it’s a debt consolidation loan. You might actually end up losing money if the new APR is high enough.
  • You’re about to get another loan. Lenders run a hard credit check that temporarily hurts your credit score when you apply for a loan. So, if you have plans to buy a new house, car or even get funding for your small business you might not qualify for the most competitive rate if you recently took out a debt consolidation loan.
  • Your debt is more than half your income. In this case, you likely won’t be able to qualify for a debt consolidation loan from a reputable lender. Instead, you might want to consider other options, like signing up for budget advice.

Pros and cons of credit card debt consolidation


  • Fewer payments to keep track of. By rolling several different balances into one you should be able to manage your repayments easier.
  • Fixed terms. A fixed term means you can’t get away with paying the minimum and ignoring your balance. Consolidation can put you on the path to debt freedom.
  • Improve your credit. Taking on a new type of credit, paying down your credit card balance and making on-time repayments all have positive effects on your credit score.
  • Potentially lower rates. Credit cards typically have higher APRs than personal loans, meaning that you can save.


  • It doesn’t wipe out your debt. Debt consolidation is only useful in some situations. If you can’t get a lower rate or qualify for affordable repayments, debt consolidation won’t do you much good.
  • You could pay more in interest. A lower rate can help, but if you sign up for a long-term loan to get the lowest monthly repayments, you could actually end up paying more in interest.
  • It doesn’t fix bad habits. In the end, debt consolidation doesn’t get to the source of the problems: Credit card spending. In addition to debt consolidation, you might want to learn how to budget or consult a financial advisor to help you stay on track.
  • You could lose some assets. If you decide to back your loan with collateral, you risk losing that if you’re unable to pay off the loan.

5 tips to beat the credit card debt trap

Debt tends to stick around once you’ve picked it up. Use these tips to avoid getting into debt in the first place.

  1. Only spend what you have. Spending more money than you know you can pay back in the near future can make your credit card balance balloon. Make sure to reduce your spending during the next billing cycle to pay off any months that you drop more cash than you have. Can’t resist the temptation? You might be better off sticking with a debit card.
  2. Avoid interest. Pay off your credit card balance in full each month. The longer you take to pay off your balance, the more difficult — and expensive — it becomes thanks to mounting interest.
  3. Don’t spend everything you earn. Spending your last dollar can leave you vulnerable to piling on debt. Make and stick to a monthly budget to help manage your money.
  4. Save up. Unexpected expenses could come along and hurl you into a pile of debt. Be prepared to make a deposit into a high-interest savings account each month for unexpected bills.
  5. Pay your bills on time. Protect your credit score by never being late on payments. You may need to get another credit card — or take out a loan — in the future, so paying on time means you can get lower, less risky interest rates.

Bottom line

Once you’ve decided to consolidate your debt you’ll need to choose the best way to do so based on your financial situation. Your plan to financial freedom can be supported by consolidation tools, but they need to be used well. Take your time and compare providers once you’ve narrowed down what you want to use. Doing so will help you get the most out of your consolidation and get you on your way to fully overcoming your debt.

Back to top

Have more questions to ask before you consolidate your credit card debt?

More guides on Finder

Go to site