Debt consolidation is when you combine your outstanding debts into one loan. So rather than paying off different loans like your credit card, personal loan and car loan at different interest rates - and sometimes with different lenders - you just have one loan, one regular repayment and one interest rate.
There are generally two ways to do it:
1. Consolidate into your home loan
One of the biggest potential benefits of consolidating into your home loan is having just one repayment to monitor, which can help make managing your finances easier.
Typically, interest rates on home loans are lower than other lending options, so if you roll all your debt into your home loan you could be paying less interest each month. You could put what you save in interest towards making extra home loan repayments to help pay your mortgage off faster. However, keep in mind that you might end up paying more interest in the long term – home loans have a longer loan term, which means a greater number of monthly repayments over time.
Use our extra repayments calculator to see how much money and time you could save by making extra home loan repayments, and see some more tips to save money on your mortgage.