Debt Consolidation: A Smarter Way to Simplify Your Finances

If you’re juggling credit cards, car loans, and personal loans, life can quickly feel overwhelming. Multiple repayments, different due dates, and high interest rates often leave people stuck in a cycle that feels hard to escape.

Debt consolidation could be the tool that helps you take back control.

What Is Debt Consolidation?

Debt consolidation means taking out one new loan to pay off all your smaller, high-interest debts. Instead of managing five repayments, you’re left with just one.

In New Zealand, lenders must follow the Credit Contracts and Consumer Finance Act (CCCFA), which means they’re required to check your income, expenses, and ability to repay before approving a consolidation loan. This ensures the new loan is realistic for your situation.

How It Works

1. Apply for a consolidation loan – either as part of a refinance or as a separate loan.
2. Use it to clear existing high-interest debts – such as credit cards or personal loans.
3. Make one repayment – often at a lower rate and much easier to manage.

The result?Simplicity, structure, and often some much-needed breathing space.

Who Is It Right For?

Debt consolidation can be a great option if:

• You’re carrying multiple debts at different interest rates.
• You want the simplicity of one regular repayment.
• You’re looking for a way to reduce financial stress and free up headspace.

The Risks to Watch For

While consolidation can be powerful, it’s not without risks:

• Stretching repayments over a longer period may mean paying more interest in the long run.
• Fees could apply for setting up the new loan or repaying old debts early.
• Without changing spending habits, it’s easy to fall back into the same cycle of debt.

The key is to treat consolidation as part of a bigger financial plan – not just a quick fix.

Making It Work for You

Debt consolidation can bring real relief, but it works best alongside new habits and support. Budgeting, financial advice, and a clear plan can help ensure this is the last time you need to restructure debt.

Watch the video to learn more about how consolidation works. If you’d like to explore whether it could work for you, let’s chat. Our advice is free.