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Debt consolidation loans

Avoid the stress of dealing with multiple rates and fees so you can focus on paying off your debt more quickly.

1 - 6 of 6
Name Product Interest Rate (p.a.) Min. Loan Amount Max. Loan Amount Loan Term Monthly Service Fee Application Fee
Harmoney Debt Consolidation Loan
7.99% - 22.99%
3, 5 or 7 years
Eligibility: Be an NZ resident/citizen, hold a valid NZ drivers license/passport, have a good credit score.
Consolidate your debt with an unsecured loan from $2,000 to $70,000.
FROM 6.99%
The Co-operative Bank Unsecured Personal Loan
6.99% - 17.75%
6 months - 5 years
Eligibility: Be 18+, an NZ citizen/permanent resident, or have a valid work visa.
Floating-rate, unsecured personal loans from $3,000.
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.
MTF Finance Secured Debt Consolidation
11.35% - 23.35%
3 - 48 months
Eligibility: Must be 18+, be an NZ citizen, resident or have a work visa, and have a regular source of income.
Benefit from a lower interest rate to repay your debt by attaching a vehicle or other asset as security. Loans available up to the value of the asset.
MTF Finance Unsecured Debt Consolidation
13.85% - 23.85%
3 - 48 months
Eligibility: Must be 18+, be an NZ citizen, resident or have a work visa, and have a regular source of income.
Pay down your debt up to $30,000 with no need to attach an asset as security with this loan from MTF Finance.
Gem Unsecured Personal Loan
10.99% - 25.99%
6 months to 7 years
Eligibility: Be 18+, a permanent NZ resident or hold a valid work visa allowing you to reside in New Zealand, employed and earning a stable income.
Unsecured personal loans with weekly, fortnightly or monthly repayment schedules and no early repayment fees.

Compare up to 4 providers

Overall Representative Example

If you borrowed $42,000 over a 5-year term at 6.99% p.a., you would make 60 monthly payments of $834.42 and pay $50,065.20 overall, which includes interest of $8,065 and a lender fee of $150. The overall cost for comparison is 8.75% APRC representative.

Do you have multiple debts that you are struggling to keep on top of? A debt consolidation loan can help reduce the interest and fees you need to pay by combining your existing loans and debts into one.

How does consolidating debt with a personal loan work?

Debt consolidation allows you to combine all your loans, credit card debt and store card debt into one. Essentially, it can give you a way to reduce your interest rates and fees, thereby giving you a way to get yourself out of debt. If you choose to consolidate your debt, you’ll have one loan repayment and one lender to deal with, rather than several.

A debt consolidation loan may help you save on interest and fees, but it’s important to also consider refinancing costs and early payout fees from your existing loans to see if the cost of consolidating is more than the money you’ll save.

People normally take this road to minimise their ongoing expenditure and make their credit more manageable. For example, if you owe $2,000 on your credit card, $2,000 on a store card and $6,000 on a personal loan, you could look for a debt consolidation loan of $10,000. As well as leaving you with a single repayment, you no longer have to deal with different interest rates and multiple fees, so it can also lead to savings in this way.

When should I consider debt consolidation?

  • If you have trouble keeping up with monthly repayments. In this case, debt consolidation can reduce the number of repayments and simplify the management of your debt. This is especially true if you are nearing the credit limit of your cards or you have already reached the limit.
  • If you have bad credit and a large amount of debt. You can consider a debt consolidation loan in order to take back control of your finances. There are some loan companies that specialise in bad credit debt consolidation loans.
  • If you want to get out of debt faster. By reducing the amount of interest and fees you pay with multiple debts, you can get out of debt faster.
  • If you want to improve your credit report. Having multiple unpaid debts on your credit report will not do you any favours for future loan applications. It isn’t a good idea to apply for further finance if you are already struggling to keep up with payments. Paying off some of the debts helps improve your credit rating and you have a lower chance of defaulting on payments.

What debt can I consolidate?

It is possible to consolidate a variety of debt using one of these loans. Common types of debt that are consolidated include the following:

  • Personal loans. This is a common type of debt to consolidate. You can take out a debt consolidation loan to:
    • consolidate two or more separate personal loans
    • a personal loan and another type of credit
    • or even refinance a personal loan to one with a lower rate and/or fees.
  • Credit cards. If you have a large outstanding balance due on your credit card, you can consider taking out a personal loan to pay it off. This is often an option when you want to consolidate your credit card with another debt or you aren’t a candidate for a balance transfer credit card.
  • Store credit cards. Balances can easily increase on store credit cards, as they do on credit cards, making them another type of debt people choose to consolidate.
  • Other credit accounts. Depending on the loan you take out, you may also be able to consolidate other types of debt. Look into what the credit provider will allow you to consolidate. Some types can include:

5 steps to consolidating your debt with a personal loan

Once you have decided to consolidate your debt, you will need to do the following:

  1. Calculate how much you need to borrow to cover your debts. This should include any fees or charges to pay off your existing debts early.
  2. Research and compare personal loan products to find one that meets your needs.
  3. Apply for the personal loan.
  4. Use the funds to pay off your other debts, along with any fees or charges.
  5. Continue to make repayments on your personal loan until it has been repaid.


Gary is a 28-year-old labourer. He currently owes $5,000 on his credit card and still has $3,000 to pay off on the car loan he took out four years ago. He has an interest rate of 19.99% p.a. on his credit card and 9.1% p.a. on his car loan, but is struggling to afford his repayments.

He has found a personal loan that will let him borrow $8,500 with a rate of 7.7% p.a. He decides to take out the loan and uses the funds to pay off his credit card and car loan, as well as the fees and charges for paying off his loan early.

Instead of having to manage multiple repayments at higher rates, Gary now just makes one repayment at a rate of 7.7% p.a., saving him both time and money.

How to compare debt consolidation loans

Pros and cons of debt consolidation


  • Lower your repayments. The majority of people who opt for debt consolidation do so in order to save on ongoing costs.
  • No more phone calls from debt collectors. If you are falling behind with payments you probably receive a number of pesky phone calls from people chasing you for money. Once you consolidate all your loans, the phone calls will more than likely stop.
  • You could avoid bankruptcy. If you are struggling to make multiple payments and think you might be headed for bankruptcy, consolidating your debt can give you a chance to get back on track.


  • You could lose your security asset. For secured loans, the lender uses an asset such as a vehicle or property as collateral towards the amount you borrow. If you get a debt consolidation loan and fail to make timely payments, you give the lender the right to foreclose on your property or seize the vehicle used.
  • Increasing debt There are instances when people who opt for debt consolidation end up increasing their debt. For example, if you consolidate your credit card balances through a debt consolidation personal loan, you may start racking up further debt on your credit cards and increase your problems.

Six tips for debt consolidation

While taking out a debt consolidation loan can help you reduce the interest you pay and better manage your repayments, it is up to you to make the most of your debt consolidation efforts. The following are some useful tips to help your debt consolidation loan work best for you:

  1. Work out a debt management plan. If you are in a position where you need to enter a debt agreement with your creditors, it is important you agree to a plan that is manageable. These agreements are informal and can be worked out between you and your credit provider. If you choose to take out a debt consolidation loan, make sure the debt management plan you enter into is the right choice for you.
  2. Use a budget. Budgeting your debt consolidation repayments ensures they remain manageable over the term of the loan. How much do you need to pay each month to ensure your debt is paid off? Work your loan repayments into your budget before you take out the loan.
  3. Compare your options. Make sure you take a look at all the options available to you before you apply for a debt consolidation loan. Are you applying for the most competitive option available? Ensure you look at fees as well as rates and any additional features you may have access to, to see if you are getting the best deal for you.
  4. Make extra repayments. If your loan allows for it, making additional repayments can help see your loan paid off sooner and save interest. Make sure you won’t be charged fees for additional repayments, lump-sum payments or early repayment penalties depending on how you plan to repay your loan. If you find you save a considerable amount on interest from consolidating your debt, make sure to put this saving back into your loan.
  5. Look for ways to cut down on your expenditure. Are there any ways you can cut down on your outgoings? By cutting down your expenditure you will have more money to make additional repayments, the benefits of which are explained above. Ensure you are in a safe position to manage your repayments and pay back your debts.
  6. Cut up your credit cards and close accounts. Continuing to use credit cards that have been paid off with a debt consolidation loan is one big mistake that people make. Once the card has been paid off, close the account and cut the card up so you are not tempted to use it.

Frequently asked questions

The debt consolidation road map can be tricky to navigate and you may not get all the answers you need from your bank or financial planner.

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