Personal Loan Consolidation – Find Relief Fast (2026)

If you're like many Australians, juggling multiple personal loans can feel like an uphill battle. The constant stream of repayments, varying interest rates, and different loan terms can make managing your finances overwhelming. What if there was a way to simplify this by consolidating your personal loans into your mortgage? This solution could potentially lower your overall monthly repayments and reduce financial stress. Let’s explore how you can achieve this and what you need to consider.

Understanding Loan Consolidation

Loan consolidation involves combining multiple debts into a single loan. In the context of consolidating personal loans into a mortgage, it means refinancing your home loan to include your existing personal loans. This can simplify your repayments and potentially secure a lower interest rate, as mortgage rates are typically lower than personal loan rates.

However, it’s important to understand the implications. While you might decrease your monthly repayments, extending your personal loan over the life of a mortgage could mean paying more in interest over the long term. Therefore, it’s crucial to weigh the benefits against the potential costs.

Current Market Rates and Options

As of 2026, mortgage rates in Australia range from approximately 4.5% to 6.5%, depending on the lender and the borrower’s credit profile. In contrast, personal loan rates can be anywhere from 6.49% to 12% or even higher. Consolidating personal loans into a mortgage can offer a lower rate, but there are several factors to consider.

Eligibility Criteria: Lenders typically assess your credit score, income, and equity in your home. Generally, a credit score above 650 and significant home equity can improve your chances of approval.

Here’s a quick comparison of different scenarios:

Steps to Consolidate Personal Loans into a Mortgage

1. Assess Your Financial Situation: Calculate your total debts, current interest rates, and monthly repayments. Determine if consolidation will save you money.

2. Check Your Credit Score: Obtain your credit report to ensure there are no errors, as this will impact your mortgage application.

3. Evaluate Your Home Equity: Higher equity increases your chances of securing a favourable rate. Use an online calculator or consult a professional.

4. Gather Necessary Documentation: Prepare your financial documents, such as payslips, tax returns, and statements of existing loans.

5. Consult with a Mortgage Broker: At Esteb and Co, our access to 83+ lenders allows us to find competitive rates and terms that suit your needs.

6. Apply for Refinancing: Submit your application with the chosen lender. Be ready to provide any additional information they may require.

7. Review and Sign the Agreement: Once approved, understand the terms before signing. Ensure the consolidation aligns with your financial goals.

Tips and Considerations

Understand the Costs: Be aware of potential costs such as exit fees from your existing loan, application fees, and any ongoing fees for the new mortgage.

Consider the Long-Term Impact: While monthly repayments might decrease, extending the loan term could result in paying more interest overall.

Shop Around: Use the expertise of brokers like those at Esteb and Co to compare offers from multiple lenders to find the best deal.

Maintain a Good Credit Score: A higher credit score can lead to better interest rates, so it’s vital to keep your credit in good shape.

Frequently Asked Questions

1. Can I consolidate unsecured debts into a mortgage?
Yes, it is possible to consolidate unsecured debts like personal loans or credit card debts into a mortgage, provided you have sufficient equity in your home.

2. Will consolidating loans into my mortgage affect my credit score?
Initially, your credit score may dip slightly due to the credit inquiry, but consolidation can improve your score over time by reducing your credit utilisation ratio.

3. Are there any risks in consolidating personal loans into a mortgage?
The main risk is extending the loan term, which can lead to higher interest payments over time. It’s crucial to consider this before proceeding.

4. How much can I save by consolidating my personal loans into a mortgage?
The savings depend on the interest rates and terms of your current debts versus the new mortgage. A detailed financial analysis is recommended.

5. What are the potential costs involved in loan consolidation?
Costs may include application fees, valuation fees, and exit fees from existing loans. Consulting with a broker can help you identify these costs.

6. How long does the consolidation process take?
The process can take anywhere from a few weeks to a couple of months, depending on the lender and your financial situation.

7. Can Esteb and Co help me with loan consolidation?
Yes, Esteb and Co can assist you by leveraging our panel of 83+ lenders to find a solution that fits your financial needs.