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SocietyOne's Debt Consolidation Guide

Everything you need to know about debt consolidation.
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7 min Read
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What is debt consolidation?

Debt consolidation is the process of combining a number of different debts into one single loan that has an overall lower interest rate. It works well in a situation where you have multiple credit cards or unsecured loans, and can save you money in interest payments. By taking out a new personal loan to repay other debts, you can get a fresh term loan with a lower interest rate.

Why do people consolidate their debt?

There are a number of reasons why people consolidate their debt, including:
1

Simplify your monthly repayment schedule

Owing money to a number of different lenders can be overwhelming. If you are trying to pay off multiple debts at the same time, these will have varying interest rates and repayment dates, which can be confusing and hard to stay on top of. Consolidating the debts into one loan will mean there is just one repayment date and one interest charge, making it easier for you to keep track of your commitments.
2

Lower your interest rate

Taking out a new personal loan to cover your current debts will mean you obtain a lower interest rate on one loan, rather than varying interest rates from numerous sources.
3

Know when your debt will get paid off

Having a number of loans and credit cards with varying end dates can make you feel like you’ll never get out of debt. A new fixed term loan will mean you will know when the debt will be paid, making it easier for you to plan out your finances.
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What types of debt can be consolidated?

There are a variety of different types of debt that can be consolidated, including:

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Credit card debts
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Medical bills
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Car loans
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Personal loans
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Utility bills

Advantages & disadvantages

Advantages
Disadvantages
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Gain back control of your credit card

Moving your credit card balance to a lower interest rate personal loan can save you money, and offer a fixed payment schedule that makes it even easier to budget.

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Exit fees

You may be charged an early exit fee from your current loans depending on your loan provider and loan terms. SocietyOne does not charge any exit fees or early repayment fees meaning you can pay off your loan early without any penalty.

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Fold multiple debts into one loan

Save on fees with one consolidated loan and have one regular repayment date.

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Taxes may apply

Government duties and taxes may apply if you are using your home loan to consolidate your debts.

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Keep on top of payments

Having a single repayment date makes it less likely that you’ll miss a repayment. Overdue payments typically lead to a default, resulting in your credit score decreasing along with additional fees.

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Budget more easily

A single payment makes it easier to budget and making life simpler. You’ll spend less time doing maths and more time putting careful consideration into your monthly budgets.

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Stop nuisance calls from creditors

Are you worried every time the phone rings? Consolidating your debts will stop debt collection agencies harassing you.

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Avoid bankruptcy or a bad credit rating

You may be able to avoid bankruptcy and avoid defaulting on your current debt by consolidating your debts into one personal loan, stopping your debt from spiralling further out of control.

Looking for a debt consolidation loan?

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What to consider before consolidating

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Is this the best option for me right now?

Taking out a debt consolidation loan is a decision that shouldn’t be taken lightly, and should offer you more benefits than the loans you currently have.
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Will this loan save me money?

Make sure the debt consolidation loan you are taking out offers a lower interest rate, and check all fees and charges associated with it.
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What are the fees and charges on this loan?

Don’t get caught out with high fees and charges from lenders. Loans available to those with bad credit often carry higher rates and fees, so be cautious.
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Read the small print!

Ensure that you know exactly what you are getting into. Ask questions, read all of the necessary paperwork and understand what it means for you if you are declaring bankruptcy.

What methods can be used to consolidate debt?

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Credit card balance transfers

Transferring your credit card balance from one credit card to a new credit card offers an easy way to consolidate debt and lower repayments, although there are some risks to be aware of.
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Home refinancing

Refinancing your home can save you money on your mortgage if done right.
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Debt settlement

Hire a debt settlement company that can help you negotiate your debt and create manageable monthly payments.
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Home equity loans

Home equity loans can give you the money you need to pay off your current debts, and secure you a reasonable interest rate on the loan depending on the amount of equity in your home.
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Debt consolidation personal loans

This is a popular way to pay off debts with one scheduled monthly payment. SocietyOne offers tailored loans specifically for the purpose of consolidating debt.
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Steps to take to consolidate your debt

1

Create an inventory of your debts

Write a list of all of your outgoings so you can visualise your debt, how much you owe and to whom.
2

Review your loan options

Do some research on what loans are available and compare debt consolidation loans.
3

Calculate repayments and interest

Work out exactly how much you will owe each month and have a sound understanding of what the contract means for you.
4

Apply for your chosen loan

Work out exactly how much you will owe each month and have a sound understanding of what the contract means for you.
5

Understand your payment schedule

Ensure you have a good grip on when your payments are due. Missing payments will incur charges and lead to additional debt.
"These smaller, more attainable goals will give you confidence in your money management and help you feel accomplished every time you hit them."
SocietyOne CEO Mark Jones

Tips for getting the most out of consolidating

Between now and your debt settlement date, create some easy savings goals with quarterly checkpoints.

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Track your spending

Take a snapshot of your outgoings. Seeing your income stacked against your expenses will help you to spot the holes in your pockets. Cut back where you can and save.
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Share your goals

Tell your friends and family about your plans and goals. Not only will this help them understand what you’re facing and respond supportively, but knowing others are aware of your intentions can help cement your own belief in your actions.
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Get creative with your social calendar

Think of some enjoyable alternatives to an expensive night out, without compromising on the fun, such as game nights, taking turns to host a dinner at home or some DIY activities.
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Track your progress

Stay motivated by tracking your progress, and give yourself a little reward here and there.

Frequently Asked Questions

Eligibility criteria for personal loans

If you’re thinking of applying for a personal loan from SocietyOne, there are a few key criteria that you’ll need 
to meet to be eligible:

  • You need to be at least 21 years of age
  • Be an Australian citizen or a permanent resident of Australia
  • You must earn more than $30,000 per annum, with Centrelink considered to be a supplementary form of income
  • It’s important that you have a good credit score

What will I need to get a personal loan?

You may need to supply us with the following 
information and documents as part of your personal 
loan application:

  • Your personal details – name, address, date of birth
  • A driver’s licence or passport
  • Proof of your address - for example, a utility bill
  • Proof of your income in the form of payslips or bank statements
  • Details about your day-to-day expenses, and any other debts

Who can apply for a SocietyOne personal loan?

You are eligible for a SocietyOne personal loan if you:

  • Be at least 21 yrs old
  • Earn more than $30,000 p.a. from employment (Centrelink may be used as supplementary income)
  • Be an Australian citizen or permanent resident
  • Have good credit
  • Be using the loan mainly for personal use

What is the process?

  1. Get your rate: In as little as 1 minute we'll give you a rate based on your credit history
  2. Apply online: Most people finish their application within 5 minutes (and it's easier to do if you're enjoying your morning coffee)
  3. Get paid: Once approved, we'll have the funds in your account in a few days

Get your rate now and get started.

How much can I borrow, and for how long?

SocietyOne's unsecured personal loans range from $5,000 to $50,000 with flexible loan terms of 2, 3 or 5 years.

I've forgotten my password

Please contact customer service on customer.service@societyone.com.au and they will arrange for the I.T department to retrieve the answers for you.

What are the interest rates?

Fixed interest rate

Your interest rate doesn't change during the life of your loan. Your repayments are always the same, making it easier to budget.

Fixed rates from 6.99% p.a*


Comparison rate

This takes into account the interest rate plus standard fees and charges, making it easier to understand the complete cost of the personal loan and compare products.

Comparison rates from 6.99% p.a*

Have some more questions?

Our support team is here to help.

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