Paying off more than one debt at a time can be challenging and complicated. Debt consolidation can help bring all your existing debts together into one loan, offering you greater control of your financial situation.

One common way to do this is by taking out a new personal loan and using the funds to pay off your other existing debts. You can then pay back this new loan with a single set of repayments over a set term, giving you peace of mind that you know exactly when and how much your repayments will be. 

How does debt consolidation work?

Say, for example, you have two different credit cards with debts of $3000 and $4000 each, and a personal loan with a debt of $7000. Each of these debts will likely have a different interest rate, repayment amount and due date, making it challenging to stay on top of them all.

To help simplify your financial situation, you can consolidate all these debts into one personal loan. This allows you to have just one set of recurring repayments to make over a set term, with a single interest rate.

If the interest rate on the personal loan is lower than your existing debts, this can also help you get ahead in reducing your overall debt.

You can use a personal loan repayments calculator to work out what your repayments could be.

Why consolidate your debts?

The key advantages are:

  • One single set of recurring repayments that are easier to manage
  • A clearer timeline of when you can be debt-free
  • Greater control of your budget and cash flow.

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Get in touch with us

If you’d like to speak with someone before taking any steps to consolidate or refinance your debt, you can call our personal loan experts on 13 1431, 8am to 7pm Monday to Friday and 9am to 2pm on Saturday (Sydney/Melbourne time). You can also visit your nearest CBA branch to speak with someone in person.

Need more help?

If the unexpected happens and you fall behind in paying what you owe, Services Australia can help you find out what services are available for you.

If you're an existing CommBank customer and are facing financial difficulty, our Financial Assistance Solutions team can help.

Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Applications for finance are subject to credit approval. Full terms and conditions will be included in our loan offer. Fees and charges are payable.