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What are the benefits of debt consolidation?

Debt consolidation involves combining several debts – including loans, credit cards and store cards – into a single loan or credit card account. In some situations, it can be a practical way to make your repayments easier to track and get a clearer understanding of how much you pay to manage your debt.

However, debt consolidation is not appropriate in all circumstances – it’s important to consider whether or not consolidating debt will leave you better off, as well as which method is best for you (you might prefer to consolidate debt with a balance transfer, for instance). Here are a handful of ways in which debt consolidation with an unsecured personal loan could help in some instances.

Simplify repayments

If you’ve ever had more than one credit card or personal loan, you’ll be familiar with how complex it can be to track different repayment schedules. Every new debt makes the process of tracking and meeting repayment obligations that much more difficult to align with your incomings and outgoings.

Bundling your debts into one place gives you the ability to reduce all of your existing repayment schedules and amounts into a consistent, regular repayment. Depending on the loan you choose, it might also present an opportunity to realign your repayments to the dates you get paid.

Reduce the cost to maintain your debts

There are certain situations in which you could pay fewer fees and a lower interest rate on the total debt amount by consolidating multiple credit cards and loans into a new unsecured personal loan. If you think this could be the case for you, take care to consider whether you’ll have to pay any break costs to end existing debts. It’s also worth considering how mature your existing loans are – if you’ve nearly paid them off, debt consolidation might be less productive than simply focusing on your current repayment obligations.

Set a date to end your debt

One of the most constructive benefits of consolidating debt with an unsecured personal loan is its fixed term – the end-date is built into the loan, which means you have a goal to work towards in paying your debt down.


Having all of your old repayments and fees simplified into a single loan with a fixed end-date, you might find it easier to understand exactly how much you owe and how long it’ll take to pay that off. If you’re thinking about applying for an unsecured personal loan to consolidate debt, keep in mind that shorter loan terms will mean higher regular repayments, but less interest to pay overall.


If you’re already a Westpac customer and are having trouble managing your repayments, learn how our financial hardship assistance could help.


Estimate how much you could borrow with a Westpac Unsecured Personal Loan using our borrowing power calculator.


Do you think debt consolidation might be a good idea, considering your situation and goals? Learn more about whether debt consolidation might be appropriate for you.


You can also read more about the features and offers on our unsecured personal loan.

Things you should know

Credit criteria, fees, charges, terms and conditions apply.

Personal Loan Contract Terms and Conditions (PDF 394KB) - for customers approved before 18 March 2024.
Personal Loan Contract Terms and Conditions (PDF 210KB) - ​for customers who apply, or are approved, on or after 18 March 2024.​

More about choosing your loan term

^ Our unsecured Personal Loans have a standard term of 1 to 7 years. If you choose a term greater than 2 years, and pay it out in less than 2 years, there is a prepayment fee of $175. This fee is waived if you pay out your personal loan by re-financing to another Westpac personal loan.