---
title: Debt Consolidation Loans Melbourne | One Repayment | GNT Finance
description: Roll credit cards, car and personal loans into one lower repayment. GNT Finance shows Melbourne borrowers the true cost of consolidating into a mortgage.
url: https://gntfinance.com.au/services/debt-consolidation/
section: services
updated: 2026-09-01
author: Gorakh Timilsina, GNT Finance
---

# Debt Consolidation Loans

**In short:** A debt consolidation loan combines credit cards, personal loans, car loans and buy-now-pay-later balances into one loan with a single repayment. Rolling them into your home loan usually gives the lowest interest rate and biggest monthly relief, but stretching short-term debt over 30 years can cost more overall unless you pay it down faster. GNT Finance runs the numbers both ways before recommending anything.

Juggling five due dates and $1,800 a month in minimum repayments is exhausting, and it is a pattern we see often across Craigieburn, Roxburgh Park and Epping: a good household income eaten by a car loan at 9%, two credit cards at 20%-plus and a personal loan for a wedding or a trip home. Done properly, consolidation lowers your rate, frees up cash flow and gives you one clear finish line.

## Who this is for

- Homeowners with $20,000 or more in unsecured debt and enough equity to absorb it
- Families whose monthly cash flow is tight but whose income is stable
- Borrowers with a decent credit file who want to protect it before missed payments start
- Renters or new owners without equity, who may still benefit from a single personal loan at a lower rate than their cards

If you are already behind on repayments, read our page on [financial hardship rights](/legal/financial-hardship-rights/) first. Lenders have obligations to help, and a hardship arrangement may be better than new borrowing.

## Two ways to consolidate

You can [refinance](/services/refinancing/) or top up your mortgage and pay out the other debts at the lowest rate available over a long term, or take a [personal loan](/services/personal-loans/) over three to seven years at a higher rate with a fixed finish date.

| Factor | Home loan consolidation | Personal loan consolidation |
|---|---|---|
| Indicative rate (for illustration) | 6.00% p.a. | 10.00% p.a. |
| Term | Up to 30 years | 1–7 years |
| Monthly relief | Largest | Moderate |
| Total interest if paid over full term | Highest | Lower |
| Needs equity in property | Yes, usually LVR ≤ 80% | No |
| Effect on credit file | One refinance enquiry | One loan enquiry |
| Best for | Owners who will make extra repayments | Renters, or owners without spare equity |

## The 30-year trap, with the maths

Take $40,000 of consolidated debt.

| Scenario | Monthly repayment | Total interest paid |
|---|---|---|
| Keep existing debts (blended ~15% p.a., 5 years) | approx. $950 | approx. $17,100 |
| Personal loan, 10.00% p.a., 5 years | approx. $850 | approx. $11,000 |
| Added to mortgage, 6.00% p.a., paid over 30 years | approx. $240 | approx. $46,300 |
| Added to mortgage, 6.00% p.a., but repaid over 5 years | approx. $773 | approx. $6,400 |

The bottom row is the one that matters. Consolidating into the mortgage at a lower rate is cheapest by far, but only if you keep paying roughly what you were paying before and direct it at the loan. Let the balance ride for 30 years and the "cheap" option costs almost three times the personal loan. We set up the extra repayments, an [offset account](/calculators/offset/) or a separate split so the discipline is built in rather than left to willpower.

## How GNT Finance approaches it

1. **Debt audit.** We list every liability with its balance, rate, minimum repayment and remaining term. Most people underestimate the total by a few thousand dollars.
2. **Cash-flow check.** We map what you currently pay against what a consolidated structure would cost, and identify how much of the relief should be redirected into paying the new loan down.
3. **Equity and servicing.** For a mortgage consolidation, we check your property value and confirm the new loan stays at or below 80% LVR to avoid [lenders mortgage insurance](/calculators/lmi/). We also confirm you pass the lender's serviceability test at the assessment rate.
4. **Lender selection.** Some lenders cap the number of debts or the "cash out" as a percentage of value; others treat consolidation as ordinary refinancing. We pick the ones that fit.
5. **Structure.** Where sensible we split the loan: the home-loan portion on a long term, the consolidated debt as a separate split with a higher repayment.
6. **Payout and close.** The lender pays each creditor directly at settlement. We ask you to close the cleared cards, not just zero them.

## Eligibility and documents

For a home-loan consolidation, lenders generally want:

- Combined loan at or below 80% of the property's value (some allow 90% with LMI)
- Stable income that services the full new loan at the assessment rate (your rate plus 3 percentage points under the APRA buffer)
- A credit file without recent defaults; a few late payments can be explained, a pattern cannot
- Debts in your own name (or jointly with a co-borrower)

For a personal-loan consolidation, the property test drops away but rate and approval depend heavily on your credit score; see our [credit score and home loans](/guides/credit-score-and-home-loans/) guide.

Documents: two recent payslips and PAYG summary (or two years of tax returns if self-employed), statements and payout figures for every debt, six months of home loan statements, three months of transaction statements, a council rates notice and photo ID.

## Worked example: a Roxburgh Park family

Priya and Sanjay own a home in Roxburgh Park worth $720,000 with a $430,000 mortgage. They also carry:

| Debt | Balance | Rate | Monthly repayment |
|---|---|---|---|
| Car loan | $28,000 | 9.5% | $590 |
| Credit card 1 | $14,000 | 21.9% | $420 (minimum) |
| Credit card 2 | $6,500 | 19.9% | $195 (minimum) |
| Personal loan | $11,500 | 12.9% | $270 |
| **Total** | **$60,000** | | **$1,475** |

Their mortgage costs about $2,578 per month (for illustration, at 6.00% p.a. over 30 years). All-in they pay $4,053 a month.

**After consolidating into the home loan:** new loan $490,000 (68% LVR, no LMI). Repayment at 6.00% p.a. over 30 years is approximately $2,938 per month. Monthly outgoings fall by $1,115.

**The GNT Finance structure:** rather than pocketing the entire $1,115, we set the $60,000 as a separate split repaid at $1,160 per month, which clears it in about five years. Priya and Sanjay still free up around $315 a month, lose four repayments, and have no long-term tail on the consolidated debt. Total interest on that $60,000 split is roughly $9,600 instead of the $69,000-plus it would cost over 30 years. Run your own figures on our [debt consolidation calculator](/calculators/debt-consolidation/).

## Costs to expect

- **Discharge fee** on the old mortgage: typically $300–$400
- **Application or settlement fee** on the new loan: $0–$600, often waived
- **Government mortgage registration and discharge fees:** roughly $120 each in Victoria
- **Break costs** if any debt has an early payout penalty
- **Personal loan establishment fee:** commonly $150–$500

Our refinance service is at no cost to you for our home-loan service in most cases, as the lender pays us a commission.

## Mistakes that undo the benefit

- **Keeping the cards open.** Within 18 months, many people are back at their old limits with a bigger mortgage on top. Close them or cut the limits to a minimum.
- **Consolidating tiny debts with big break fees.** A $3,000 balance with a $900 exit fee may be better paid out from savings.
- **Pushing the LVR over 80%.** LMI can add thousands and wipe out the savings.
- **Not disclosing every debt.** It appears on your credit file anyway and can sink the approval.
- **Treating the relief as a pay rise.** Redirect at least half of it to the loan.

## Why use a mortgage broker for debt consolidation

Your existing bank will happily add debt to your mortgage, but it will rarely ask whether that is the cheapest path or set the structure up so you actually pay it off. GNT Finance is bound by a Best Interests Duty, so we must recommend what suits you, not what pays most. Gorakh Timilsina's years as a Senior Credit Officer mean we know how lenders view consolidation files and how to present one so the debts being cleared count in your favour. If a personal loan or a hardship arrangement is the better answer, we will say so. Read more in our [debt consolidation guide](/guides/debt-consolidation-guide/).

## Frequently asked questions

### Will consolidating debt into my mortgage hurt my credit score?

A refinance creates one enquiry on your file, which has a small, short-term effect. Paying out and closing several cards and loans usually improves your position over the following months because your total limits fall and your repayment history becomes consistent. What hurts a score is missing payments, so consolidating before that happens is generally protective.

### Can I consolidate debt if my home loan would go above 80% LVR?

Some lenders allow it up to 90% with lenders mortgage insurance, but LMI on a $600,000 loan can run into the thousands and often cancels out the benefit. In that case a personal loan for the smaller debts, combined with a rate review on the mortgage, may deliver a similar cash-flow result without the LMI cost. We model both.

### Is debt consolidation the same as a hardship arrangement?

No. Consolidation is new borrowing at a lower rate. A hardship arrangement is a temporary change your existing lender must consider under the National Consumer Credit Protection Act if you cannot meet repayments, such as reduced payments or a pause. If you are already behind, hardship relief may be the better first step and does not require a new loan or a credit check.

### How much can I save each month by consolidating?

It depends on your balances and rates, but a household with $40,000–$60,000 of cards and personal loans typically cuts monthly repayments by $700–$1,200 by moving them to a mortgage rate. The bigger question is total cost, which is why we recommend keeping repayments higher than the minimum so the consolidated amount is cleared within a few years.

### Can I include a car loan or a tax debt?

Car loans can usually be included, though check the payout figure for early-termination fees. ATO debt is accepted by a limited group of lenders and usually needs a payment plan history; a few decline it outright. Buy-now-pay-later balances and store cards can generally be included as long as the lender can see the payout amount.

## Talk to GNT Finance

If your repayments have crept up and you would like one loan, one date and a plan to be rid of the debt, GNT Finance can show you the real numbers in a single conversation. We help families across Melbourne's north and beyond, in English, Nepali or Hindi. [Book a free consultation](/contact/) or call 0426 403 703.