Debt consolidation means taking out one new loan to settle several existing debts — store accounts, credit cards, overdrafts or other loans — so you're left with a single credit provider and a single monthly instalment instead of several.
Whether consolidating actually saves you money depends on the new interest rate compared with your existing debts, the term of the new loan, and any settlement or early termination costs on your current accounts. A lower monthly instalment isn't automatically a cheaper deal — a longer term can mean paying more in total, even at a lower rate.
To qualify for a consolidation loan, the credit provider must carry out a fresh affordability assessment and credit check under the National Credit Act, in the same way as for any other personal loan. They will typically want details of the accounts you intend to settle.
If your existing debt already feels unmanageable, it's worth speaking to the National Credit Regulator or a registered debt counsellor before taking on further credit — debt review may be a better option than consolidation for some consumers.
Below we've listed credit providers offering debt consolidation loans, with loan amount, interest rate and an example for each.