Debt Consolidation Calculator

What is debt consolidation?

Debt consolidation is an effective method for managing an array of debts with varying fees, rates and payment schedules. With the help of our debt consolidation calculator, you can determine your total debts and consolidate them into one new debt consolidation loan, or make them an extension of a current loan. For example, this could be adding them as an extension to your mortgage.

Why consolidate your loans?

Consolidating debt can be a great way of managing your debt repayments and attaining a lower interest rate and fees (or both). One of the main reasons for consolidation loans is that it allows you to, potentially, refinance to a better rate, access preferred features or lower fees. This is because credit card and car loan debts often have higher interest than a debt consolidation home loan. Another benefit is that it may allow you to borrow more money to put towards things such as home renovations or a holiday.

However, it is important to be aware of your financial capacity and not put yourself deeper in debt with the added credit. It is recommended that you speak to a financial professional if you’re unsure.

How to use a debt consolidation calculator

If you’re asking yourself how to consolidate debt, our debt consolidation loan calculator is the tool for you. The calculator will give you an estimate of how much your home loan repayments may change when consolidating other debts into your current loan. All you need to do is plug in:

• Your current home loan balance, loan term and interest rate
• Your other debt information
• The interest rate and term of the new loan

You can adjust the loan term, type and interest rates until you find a solution that works for you. Then, you will have an idea of your new repayments and interest costs, and the savings you could be making on total interest and repayments.

Extra benefits of consolidating your debts

Additional benefits of debt consolidation loans are:

• Repayment frequency: When you get a debt consolidation loan you align all of your debts to one repayment date which is much easier keep track of.
• Direct debit to never miss repayment: When all your debts are bundled into one, you can set up a direct debit for your single repayment, this means you won’t be missing anymore repayments.
• Fixed rate is possible for certainty: Bundling all your debts into a consolidation loan means that you could move away from variable rates. Having a fixed rate means you’ll have certainty every repayment and a better idea of how to reach your savings goal.

How much can I borrow?

How much you can borrow will vary depending on your own financial circumstances and the lender you choose. If you are consolidating into a home loan, your property value, equity and lenders mortgage insurance (LMI) will be the predominant factors taken into consideration when calculating your borrowing capacity.

Does your credit rating and history matter when consolidating debt?

Your credit rating and history have the same influence throughout the debt consolidation process as they do for other loan applications. If you are looking for debt consolidation with bad credit, it is still possible - you’ll just need to find a lender who is willing to approve your application. Be aware that, as a result of bad credit history, your interest rate may be higher than average.

Alternatively, a debt consolidation loan may give you the opportunity to improve your credit rating because it can make it easier to stay on top of repayments with one simple payment.