Add Personal Loan to Home Loan? Discover Easy Approval (2026)

With financial commitments weighing you down, you might be wondering if there's a way to streamline your debts by adding your personal loan to your home loan. It's a common query among Australians seeking to simplify their financial lives. Let's delve into whether this strategy is right for you and how you can potentially make it work to your advantage.

Understanding Debt Consolidation

Debt consolidation involves combining multiple debts into a single loan, ideally with a lower interest rate, to simplify repayments and potentially save on interest. By rolling a personal loan into your home loan, you could benefit from the typically lower interest rates associated with home loans compared to unsecured personal loans. However, this approach requires careful consideration of several factors, including your current financial situation, the terms of your existing loans, and your long-term financial goals.

Interest Rates and Options

Current interest rates for home loans in Australia (as of 2026) generally range between 6.49% and 7.5%, depending on the lender and your financial profile. In contrast, personal loan rates can vary significantly, often falling between 9% and 12%. By consolidating, you might be able to leverage the lower home loan rates to reduce your overall interest payments. However, it's crucial to ensure that this move aligns with your financial strategy.

Eligibility to consolidate your personal loan into your home loan typically depends on your home equity, credit score, and the lender's specific requirements. Being part of Esteb and Co's panel of 83+ lenders, we can explore diverse options to find a solution that best suits your needs.

Steps to Consolidate Your Personal Loan into Your Home Loan

Consolidating your personal loan into your home loan is a multi-step process that requires thorough preparation and understanding. Here's a step-by-step guide:

1. Assess Your Financial Situation: Begin by evaluating your current debts, interest rates, and monthly repayments. Determine how much equity you have in your home and consider your long-term financial goals.
2. Research and Compare Lenders: With the vast array of lenders available through Esteb and Co, compare the terms and interest rates they offer. Look for a lender that provides the most favourable terms for consolidation.
3. Consult a Mortgage Broker: A mortgage broker can help you navigate the complexities of debt consolidation. They can assist in identifying the best options based on your unique financial situation.
4. Apply for a Loan Refinance: If consolidation is feasible, proceed to apply for a refinance of your home loan. This process may involve additional fees, such as application or valuation fees, which should be factored into your decision.
5. Pay Off the Personal Loan: Once approved, use the funds from your refinanced home loan to pay off your personal loan in full. Ensure that all terms are clearly understood and agreed upon before finalising the process.
6. Maintain Regular Repayments: With your debts consolidated, focus on maintaining regular repayments on your new home loan to avoid future financial strain.

Tips and Considerations

Before proceeding with debt consolidation, consider these expert tips:

• Long-Term Costs: While consolidating might lower your monthly payments, extending the loan term could lead to paying more interest in the long run.
• Impact on Equity: Using your home equity for consolidation reduces your stake in the property, impacting future financial flexibility.
• Financial Discipline: Ensure you maintain financial discipline post-consolidation to avoid accruing new debts, which could offset the benefits.
• Consultation with Professionals: Engage financial advisors or mortgage brokers to evaluate the suitability of debt consolidation for your circumstances.

Frequently Asked Questions

• Can I consolidate my personal loan into my home loan without refinancing?
  No, consolidation typically requires refinancing your home loan to incorporate the personal loan amount.
• Will consolidating my debts affect my credit score?
  Initially, applying for a refinance might impact your credit score, but timely repayments can improve it over time.
• Are there any fees associated with consolidating loans?
  Yes, there may be fees such as application, valuation, or exit fees associated with refinancing.
• Is debt consolidation always beneficial?
  Not necessarily. It depends on your financial situation, loan terms, and ability to maintain repayments.
• How long does the consolidation process take?
  The process can vary but typically takes several weeks, depending on lender processing times and your preparedness.
• What if I have a fixed-rate home loan?
  Consolidation may still be possible, but breaking a fixed-rate loan might incur penalties, so consult your lender.