Are you struggling with debt? Anxious about opening that gigantic pile of letters? Managing your debt can be an enormous strain.

Through careful debt consolidation, you can take back control of your finances. That’s where LJ Hooker Home Loans can help you with tips to manage your debt.

What is debt consolidation?

Many Australians experience debt stress, so the first thing to remember is that you’re not alone. It’s in your lender’s best interests to help you manage it. When you consolidate debt, you fold several outstanding debts into one loan.

Everyone’s circumstances are different, but for example, you might have a couple of credit card balances, a car loan and a personal loan. Some of these can attract high interest, so it can feel like it’s impossible to get ahead.

With a consolidated debt loan, you just have one repayment to make each month. With a lower interest rate, making the same repayments can actually clear your debt faster, and you can keep track of what’s owing.

Understand your debt position first

While it’s natural to want to avoid looking closely at your debt, understanding it in detail is the best first step you can take.

Look at things like:

  • How much do you owe across all of your debts?
  • How much interest are you paying each month in total?
  • Where are you paying too much in fees?
  • What are the exit conditions of each debt?
  • Is there anything you can pay off right away?

Getting a copy of your credit report can help you see how your outstanding debt has affected your overall position and how you can improve it for the future.

What are the options to help pay off my debt?

There are several strategies for debt consolidation. It’s important to find the right solution for you and the debt you’re facing.


  1. Learn to budget.

We spend a huge amount on everyday expenses without even realising it. To save some and help you start to pay off your debt, try strategies like setting up separate bank accounts for things like:

  • Holidays
  • Future bills like rates, vehicle registration, etc
  • School fees

Set up as many accounts as you like. Convert any annual, or otherwise expense to monthly and ensure you save the required amount into the relative account. This way you will have the money available from savings when the bill or expense is due.

Simple changes like comparing deals, planning ahead and reducing your carbon footprint can all contribute to saving you money.


  1. Your home loan – the lowest rate of all debt.

If you have a mortgage already, it might be possible to use your home loan for debt consolidation.

The main benefit is that a home loan comes with the lowest rates of all types of credit. Consolidating debt may be as simple as refinancing or topping up the balance of your loan to pay out other debts, or refinancing to a new, bigger loan if you believe this lets you access a better loan rate or improved features.

This does mean your overall loan will take longer to pay down, but repayments on your debt consolidation will be much lower. If you can afford to, pay some of the extra you’re saving to bring the whole balance down sooner.


  1. A personal loan – handy for budgeting.

A personal loan can be a useful tool to consolidate debt. If you shop around, you may find you can get a low rate loan with zero account keeping fees, which will help your budget stretch further. Choosing the shortest loan term you can afford will also mean you pay less interest over time. Watch out for lenders that charge early payment fees – you shouldn’t be penalised for clearing the debt sooner.


  1. Financial hardship options.

Life can throw unexpected surprises at us. If you have lost your job, suffered an illness or injury, or been affected by a natural disaster, we want to help you manage your financial position. Through our specialist home loan products we may be able to offer assistance with any difficulties you’re experiencing.


Debt consolidation can be a handy solution in the right circumstances. If you would like to explore your options, our lending specialists offer free advice and are available online, on the phone, or in person.

Simply contact us below and we’ll be in touch.

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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.