Debt Consolidation for Emergency Services

Working out loan repayments with a calculator and notepad

If This Sounds Familiar

This is the one where our interests and yours can part company.

Consolidating debt into a home loan is straightforward work and it pays us. That is exactly why it is worth saying plainly that it is not always the right thing to do.

Done once, with the cards closed afterwards, it can take real pressure off and save a meaningful amount of interest. Done repeatedly, it stretches short-term debt over twenty-five years and costs far more than it looks like it saves.

If what you actually need is a plan rather than a product, we will tell you that, and point you somewhere useful. Nobody is paying us to say it.

Get an honest read

What Changes the Picture

Three things to weigh
before rolling it all together

Writing out a list of debts and repayments on a notepad

One repayment is genuinely easier

Several debts with different rates, limits and due dates take real mental effort to manage, and a missed date on any of them has consequences. Reducing that to one payment has value beyond the interest.

Weighing up a financial decision at home

A lower rate over a longer term

Moving a card balance onto a home loan rate looks like an obvious saving. Spread across the remaining term of the mortgage, the total interest paid can still end up higher. The monthly figure improves either way.

What happens to the cards

The single biggest factor in whether consolidating works is whether the balances come back. If the limits stay open, they usually do, and then there is a mortgage and a card balance instead of just a card balance.

The Honest Version

When it works, and
when it does not

This is not a complicated product. The difficulty is entirely in deciding whether it is the right one, so here is the way we think about it.

When it tends to work

There is a clear reason the debt built up, that reason has passed, and the accounts are closed as part of the process rather than left open.

The repayment is kept at something close to what was being paid before, so the shorter-term debt is actually cleared rather than quietly amortised over the life of a mortgage.

When it tends not to

It has been done before. A second or third consolidation is almost always treating a symptom, and the honest answer is usually that the problem is upstream of the lending.

Or the balances are being moved without anything else changing, which converts a short, visible problem into a long, invisible one.

If you are in the second group, we would rather say so and keep the relationship than write the loan and lose it. Plenty of the people we work with now first spoke to us at a point where the right advice was to wait.

Common Questions

Debt consolidation questions

The ones people ask, often after putting off asking for a while.

Will consolidating damage my credit file?

Closing accounts and taking a new loan both show up, and the overall effect depends on your situation. Clearing revolving debt and keeping repayments on time is generally read well over time.

Applying to several lenders in quick succession is read less well, which is another reason to work out where an application should go before lodging it.

Can I consolidate if I have missed payments?

Sometimes. It depends how recent, how many, and what has happened since. There are lenders whose policies accommodate a patchy stretch where the mainstream banks will not.

It is worth asking rather than assuming the answer is no. It is also worth being told honestly if the answer is not yet.

Do I have to close my credit cards?

Most lenders require it as a condition of the consolidation, and we would recommend it regardless. The balances coming back is the single most common way this goes wrong.

If you want one card kept for emergencies, that is a reasonable conversation, usually with a much smaller limit.

What if consolidating is not the right answer for me?

Then that is what we will tell you, and we will try to be useful about what to do instead, including pointing you to free financial counselling where that is the better fit.

There is no cost to the conversation and no obligation attached to it.

Start Here

Get an honest read on it

No judgement, and no assumption that a loan is the answer. Worked around your roster, and confidential.

A useful tool once. A warning sign by the fourth time.

This is the one where our interests and yours can part company.