Feeling weighed down by multiple repayments for multiple loans – and wondering what’s the smartest way to get on top of them? Many Kiwis reach a point where juggling different due dates and high-interest repayments becomes stressful.
Debt consolidation can be a powerful way to simplify and save, but the best approach depends on your personal situation. Here we’ll walk through the smartest options available in NZ, and why working with a mortgage adviser can help you make the right choice.
If you’re still unsure what debt consolidation is, check out our guide on what debt consolidation is and how it works, and why it helps.
Not all consolidation options are created equal. A “smart” strategy in New Zealand will usually include the following elements:
The best way to consolidate debt in New Zealand depends on your personal situation. Homeowners with available equity may be able to restructure debts into their home loan, whilst others may be better suited to a structured personal loan.
Factors such as interest rates, available equity, income stability and lender criteria, all influence which option is the most appropriate. A solution that works well for one borrower, may not be suitable for another.
Different borrowers will suit different approaches. Since there are several ways borrowers can consolidate debt – the right one for you depends on your goals, income and equity.
Rolling short-term debts into your home loan for homeowners with sufficient equity, may reduce interest costs. However, you need discipline not to re-run up credit card balances or other unsecured debt, which is very tempting and easy to do.
If you don’t have equity (i.e. you don’t own a property and are renting), a structured personal loan may replace multiple credit cards or hire purchases, with one interest rate, at a fixed repayment.
In some situations, a borrower may not fit a standard bank consolidation pathway because of income structure, credit history, affordability, or lender criteria. If that happens, it is important not to keep applying without a clear strategy. A mortgage adviser can help you understand whether there are still suitable consolidation options to consider and whether any pathway is realistic for your situation.
For example, a self-employed borrower with multiple unsecured loans may not meet a bank’s standard servicing criteria. In that situation, a mortgage adviser can help assess whether any suitable consolidation structure is realistic based on income, equity, affordability, and overall risk.
Choosing between consolidation strategies is not always straightforward. The right structure depends on your repayment capacity, long-term plans and overall risk tolerance.
A mortgage adviser can:
Before choosing a strategy, it’s important to understand how consolidation would affect your total interest, loan term, and overall financial position.
For a full breakdown of how consolidation can be structured, including eligibility considerations and potential risks, review our Debt Consolidation Page.
Angela is an accredited Financial Adviser, licensed under FSP742251 and has been in the Financial Industry since 2006. Our 5-star Google reviews reflect the excellent customer experience we promise — making your home loan journey positive, stress-free, and rewarding. At Platinum Mortgages, our clients are the reason we exist — so you can be confident every step is guided by genuine care and expertise.
