Each debt you include is paid out in full at settlement, usually by the new lender directly, and the old accounts are closed. You are left with one loan, one interest rate and one repayment. The loan is usually secured against property, which is what brings the rate down.
Personal and business debts can sit in one consolidation, though lenders treat them differently. Where the Australian Taxation Office (ATO) is a creditor, an ATO tax debt broker can work out whether that balance belongs inside the new loan or in a facility of its own. The general interest charge (GIC) on overdue tax is 11.51% for the October to December 2026 quarter, compounds daily and is reset by the ATO each quarter.
As a Melbourne broking team arranging residential and commercial lending, Loanworx Group places the personal and business sides of a file with lenders whose policy suits each one.
Call our Melbourne brokers on 1300 562 696 with your statements, and we will show you what one loan could look like for your mix of personal and business debt.
These debts can usually be included, provided each has a current statement and a payout figure:
Higher Education Loan Program (HELP) debt is usually left where it is. It is indexed each year instead of charged interest and is repaid through the tax system, so moving it into a mortgage seldom reduces what you pay.
A debt consolidation home loan is the most common structure, though the right one depends on where your equity sits, what the debts are and how your income is documented:
You move your home loan to a new lender and borrow enough extra to clear the other debts in the same settlement. A refinance broker compares each lender’s consolidation policy alongside its rate, and break costs may apply where the existing loan is fixed.
Your current lender increases the existing loan and pays the debts out. It can be quicker to arrange, though you see only one lender’s rate and view of your file.
A single unsecured personal loan pays out cards and smaller loans over a far shorter term than a mortgage. It keeps your home out of the loan and limits total interest, at a higher rate than secured lending, and a personal loan broker compares lenders that accept consolidation as the loan purpose.
A second loan sits behind your existing home loan, secured against the same property, so the first loan and its rate stay untouched. It may suit a borrower on a low fixed rate facing heavy break costs, though pricing is higher and terms are shorter than for a first mortgage.
A private lender provides a short-term loan secured against property, where speed matters more than price, such as when a creditor has started recovery action. Rates and fees sit well above bank pricing, so a private lending broker maps the exit to standard lending before the loan begins.
Where defaults, late payments or a past arrangement sit on your file, specialist lenders may still consolidate at a higher rate and a lower maximum loan to value ratio (LVR). A bad credit home loan broker reads the file first, so the application goes to a lender whose policy already accepts it.
Overdue tax is paid to the ATO at settlement, which stops the GIC compounding on that balance. Many mainstream lenders will not accept tax debt as a loan purpose, and weighing tax debt in a mortgage against an ATO payment plan shows whether a long loan term costs more overall.
Self-employed borrowers without two years of finalised financials may consolidate on business activity statements (BAS), bank statements and an accountant’s declaration. A low doc loan broker matches the file to lenders that accept this, usually at a lower maximum LVR and a higher rate.
Business cards, overdrafts and short-term funding are refinanced into one facility in the business’s name, sometimes secured by business assets instead of the family home. A business restructure loan broker focuses on cash flow and trading history, since that is how the facility is assessed.
Where the business owns its premises or a commercial investment, the equity there can clear business debt and keep the family home out of it. A commercial refinance broker works with a narrower lender panel, and maximum LVRs are typically lower than for residential lending.
Consolidation tends to work when it changes the cost of the debt, not just its shape:
A consolidation is assessed as a new loan for the full amount, and the lender usually works through five areas:
How much debt you can clear depends on the equity in your property. Lenders mortgage insurance (LMI) usually applies above an 80% LVR, and some lenders cap consolidation below the maximum they allow for a purchase.
Banks and other lenders regulated by the Australian Prudential Regulation Authority (APRA) generally test the new repayment at least 3 percentage points above the actual rate, a buffer APRA confirmed in May 2026. Non-bank lenders set their own buffers. Each card you keep is counted at a set percentage of its full limit, so closing paid-out cards can lift what you are able to borrow.
Missed repayments in the last 12 months, recent defaults and a run of credit enquiries all narrow the lender panel. Older, paid listings typically weigh far less.
Each debt needs a recent statement showing the balance, the limit and the account details. The lender usually pays each creditor directly from those details.
Where business or tax debt is included, lenders want tax returns and BAS lodged so the debt is a known figure. An unlodged return can hold up the whole application.
This is a general guide only. Consolidation policy differs between lenders and changes over time.
Business debt consolidation usually needs its own structure, since business debt is taxed and regulated differently from personal debt. Interest is generally deductible according to what the borrowed money is used for, not what secures it, and a separate loan split keeps that use traceable.
Where a director borrows personally to clear a company’s debts, the interest may not be deductible to the director at all. Your accountant should confirm the position before settlement.
GIC incurred from 1 July 2025 can no longer be claimed as a deduction under the ATO’s GIC rules, so overdue tax left unpaid is a cost with no tax offset.
Business-purpose loans also sit outside the National Consumer Credit Protection Act 2009 (NCCP Act), so some consumer protections that apply to a home loan, including a broker’s duty to act in your interests, do not apply to them. Securing business debt against the family home means the home carries the business’s risk.
Choosing to consolidate debt into your mortgage usually lowers the monthly repayment and raises the total interest. As an illustration, $40,000 of card and loan debt added to a home loan at an assumed 6% costs about $240 a month over 30 years, with roughly $46,300 in interest. Repaid over five years at the same rate, the repayment is about $773 a month and the interest about $6,400.
Keeping your repayment at its current level narrows the gap. Extra repayments, or a separate split with its own shorter term, keep the lower rate without the longer term.
Setup costs vary with the structure and may include discharge fees on the old loans, break costs on a fixed rate, early payout fees, valuation and application fees, and government registration fees.
For most home loans, the lender pays us a commission after settlement. Where a complex file warrants a fee, it is disclosed in writing before any work begins.
A smaller repayment and a single due date each come with something given up:
| Factor | Where It Can Help | Where It Can Cost |
|---|---|---|
| Interest rate | Secured lending is usually priced well below card and personal loan rates | Specialist and private lending is priced higher, narrowing the saving |
| Monthly repayment | One repayment, often lower, can free up cash flow | A lower repayment usually comes from a longer term |
| Total interest | A shorter term or extra repayments can cut total interest | A 30-year term on short-term debt can multiply it |
| Security | Unsecured creditors are paid out and collection pressure stops | Your home or business property secures debt that was unsecured |
| Credit file | Closed accounts and on-time repayments can strengthen the file over time | A new application adds an enquiry, and a decline adds another hurdle |
| Tax position | Business debt refinanced for business use may stay deductible | Mixing business and personal debt in one split can blur the deductible share |
Most consolidations move through five stages, with timing driven mainly by the lender and the valuation:
You send statements for each debt, your income documents and consent to check your credit file. We list every balance, rate, limit and repayment, so the total is a confirmed figure instead of an estimate.
We shortlist lenders whose policy accepts your mix of debts, your equity and your credit history. You see each option’s repayment, term, setup costs and total interest side by side before choosing.
We prepare and lodge one application, and the lender orders a valuation of the property. Assessment can take from a few days to several weeks, depending on the lender and the complexity of the file.
At settlement, the lender pays each creditor directly and the old accounts are closed. Your first repayment on the new loan is usually due about a month later.
We confirm every payout has landed and every account is closed. We then help set a repayment that clears the debt within the timeframe you choose.
Timeframes are a general guide only and depend on the lender, the valuation and how quickly documents are supplied.
A first conversation needs your balances and repayments, not a full application.
Loanworx Group works from Level 15, 412 St Kilda Road, Melbourne, with clients across Australia:
We compare major banks, second-tier lenders, non-bank funders and private lenders in one conversation. That range matters on consolidation, where lender policy on debt purpose varies widely.
Our brokers bring more than 100 years of combined experience, including former bankers. That helps when one file mixes personal, business and tax debt that each lender reads differently.
Home loans, commercial finance and asset finance are arranged under one roof. A file that mixes personal and business debt stays with one team.
Our Zero Debt Club program focuses on clearing debt sooner after settlement. Support comes from brokers trained as Certified Credit Coaches.
Credit services are provided under Australian Credit Licence (ACL) 495267. For consumer credit, Part 3-5A of the NCCP Act requires us to act in your interests and put them ahead of our own.
Write down each debt with its balance, rate, limit and monthly repayment, and attach the latest statement for each. Then call our Melbourne brokers on 1300 562 696, and we will show which consolidation structures could suit the list.
The application adds a credit enquiry, which may lower your score for a time. Closed accounts, lower total limits and on-time repayments on one loan generally count in your favour as the months pass.
Often, through specialist lenders that assess the whole file and not just the score. A paid default, clean conduct since and enough equity usually widen the options, though the rate is typically higher than mainstream pricing until the file improves.
Usually, where the lender accepts tax debt as a loan purpose. Lenders read how the plan has been kept much like repayment history, and the remaining balance is generally paid to the ATO at settlement.
It is possible, though it changes who owes the money. Company debt is often refinanced through a facility in the company’s name instead, usually backed by the directors personally, and your accountant can confirm which structure suits the tax position.
We find out why before anything else is lodged. The answer may be a specialist lender, a smaller consolidation that clears the most expensive debts first, or six months of clean conduct before reapplying.
Where the debt is beyond what any loan can fix, free financial counselling may be the more useful next step.
This information is general in nature and does not take into account your objectives, financial situation or needs, and it is not tax advice. Lending approval, rates, fees, LVR limits and loan features are subject to lender assessment and can change. The repayment illustration uses an assumed rate and is not a quote. The general interest charge is set quarterly by the ATO, and the figure quoted applies to the October to December 2026 quarter. Consolidating debt may increase the total interest you pay over the life of the loan. Tax treatment should be confirmed with your accountant or registered tax agent, and you may wish to speak with a qualified mortgage broker or financial adviser before acting.
