Debt consolidation and refinancing

If you are struggling to manage your debts, it may sound like a good idea to pay someone to fix your credit problems and roll all your loans into one loan. Here we explain what to consider before you refinance your loans and how you can get help for free.

• Consider other options before you refinance
• Check the debt consolidation loan is right for you
• Avoid refinancing traps
• Get free debt help

Consider other options before you refinance

Consolidating or refinancing loans can work for some people if it means they will pay less in fees and interest. For others, it may only be a short-term fix, especially if they can’t meet the repayments on the new loan.

Before you refinance or spend money paying a company to help you with your debts, there are things you can do.

Talk to your credit provider

If you are struggling with your repayments, try to come to a new arrangement with your credit provider. See trouble with debt for information on how to do this.

Switch home loans

Changing home loans could save you money, but you need to be careful. Some mortgage brokers or lenders make a commission if they persuade you to switch loans. They may make misleading claims about how much you might save, just to sell you the new loan. See switching home loans for more information.

Sell your home

You may be better off selling your home if you are struggling with mortgage repayments. It is better to sell your home on your own terms than for the credit provider to sell it as amortgagee sale. You may even end up with money left over to repay other debts.

Video: Becky is behind on her mortgage

See what happens to Becky when her relationship breaks up and she gets
a letter from her bank about falling behind on her mortgage. She decides she needs some free legal advice.

Transcript: Becky is behind on her mortgage

Get free financial counselling

When you are having money problems it may be better to seek help from a financial counsellor to help you sort out your money and help negotiate your debts with your creditors.  Find out how a free financial counsellor can help you.