Debt Consolidation Planning

Overview

Debt Consolidation Planning is a free, no-obligation service for Hobart and Tasmanian households juggling several debts, such as credit cards, personal loans, buy now pay later accounts or a car loan. We help you see everything in one place, compare the true cost of keeping things as they are against consolidating, and build a plan you can stick to, whether or not that plan involves a new loan.

Hobart Loans is not a lender and does not hold an Australian Credit Licence. We don't offer consolidation loans, negotiate with creditors on your behalf, recommend a specific product or make credit decisions, and we can't promise approval or lower repayments. If you decide you'd like to talk to a licensed lender or broker, we can refer you to an Australian Credit Licence holder. Before we do, we disclose whether we receive a referral fee and how much, and you are free to decline.

Who it's for

• People with two or more debts who find the different due dates, rates and minimum payments hard to keep track of.
• Credit card holders paying mostly interest each month and making slow progress on the balance.
• Borrowers who have received a consolidation loan offer and want to check whether it truly saves money.
• Homeowners wondering whether to roll short-term debts into their mortgage, and what that really costs over time.

What we help with

A complete debt snapshot

We help you list every debt with its balance, interest rate, minimum repayment, remaining term and any early payout fee. Seeing it all on one page is often the most useful step, because it shows which debts are costing the most.

Comparing total cost, not just repayments

A consolidation loan with a lower monthly repayment can still cost more overall if the term is longer or the fees are high. We help you compare total interest and fees across scenarios using the loan calculator. Our article Long-Term Loans Explained shows why stretching a term changes the total.

Alternatives to a new loan

Depending on your situation, options may include asking existing lenders for a hardship variation under the National Credit Code, paying debts off in a deliberate order (highest rate first, or smallest balance first for motivation), a balance transfer card with a firm payoff plan, or reducing credit limits. We explain these in general terms so you can choose what to explore.

Protecting your credit file

Multiple applications in a short time leave several enquiries on your credit file, and comprehensive credit reporting records your repayment history. We explain how to get free reports from Equifax, Experian and illion, and what lenders tend to look at. See how lenders assess loan applications.

Avoiding costly "debt help" traps

Some businesses charge significant fees to "fix" credit or manage debts, sometimes for things you could do yourself for free. Moneysmart and ASIC publish guidance on what to watch for, and we'll point you to it.

How it works

1. Reach out

   Send a short enquiry through the contact form describing the debts you have, roughly. We reply within one business day.

2. Build your debt snapshot

   Together we list balances, rates, repayments and fees. There's no credit check and no judgement, just the numbers.

3. Compare the scenarios

   We prepare illustrative comparisons: staying as you are, paying down in a planned order, and consolidating over different terms, showing total interest and fees for each.

4. Your written plan

   You receive a summary of the options worth exploring, the questions to ask any lender and the free support services available.

5. Optional referral

   If you want to speak to a licensed lender or broker, we disclose any referral fee first and, with your consent, make an introduction. You remain free to decide.

What you'll need

• Latest statement for every credit card, including limit and interest rate
• Latest statement for each personal loan or car loan
• Buy now pay later account summaries
• Payout figures, including any early repayment fees, for loans you'd consider clearing
• Details of any overdue amounts, arrears or collection notices
• Two recent payslips or other proof of income
• Three months of transaction account statements
• A realistic monthly budget of living expenses
• Your free credit reports from Equifax, Experian and illion
• Your home loan statement, if you're considering refinancing

Options compared

Advantages & watch-outs

Worked example: when consolidation saves money, and when it doesn't

Example (illustrative only): a Hobart household owes $9,000 on a credit card at an illustrative 20% p.a. and $11,000 on a personal loan at 13% p.a. with 3 years left. If they pay both off over 3 years with fixed monthly payments and no new spending, that's $334.47 a month on the card plus $370.63 on the loan: $705.10 a month and $5,383.81 in total interest.

They're offered a $20,000 consolidation loan at an illustrative 11% p.a. with a $300 fee paid upfront. We compare two terms, assuming no early payout fee on the existing loan.

The 5-year option looks attractive because the repayment drops by $270.25 a month, but it costs more than doing nothing. Keeping the term the same captures the benefit of the lower rate. Either way, the plan only works if the credit card isn't run back up; many people reduce the limit or close the card once it's cleared.

Looking for a straightforward loan for a purchase instead? See Personal Loan Comparison, or browse our glossary.