How this month’s top personal loans could help you consolidate your debt

Debt consolidation personal loans can be a helpful tool for those who may be finding it difficult to get on top of pre-existing loans and credit card debt. And if that’s the case for you, you might be interested to know that you’re not alone.

Data released by the Reserve Bank of Australia earlier this month revealed that, despite Australians having wiped $6.96 billion of debt accruing interest off their credit cards in the year since COVID hit, the numbers are beginning to plateau.

This followed the release of the Australian Prudential Regulation Authority Monthly Authorised Deposit-taking Institution Statistics late last month, which found that credit card lending increased by $0.4 billion or 1.3 per cent year-on-year in March.

Likewise, research from Citi found that credit card spending for April 2021 was 35 per cent higher than April 2020 at the start of the pandemic.

While it may sometimes be tempting, paying only the minimum amount due on your credit card each month could mean that it’ll take you years to pay off the debt in full, as well as piling on interest charges along the way.

Plus, if you have multiple credit cards, or other forms of finance such as a car loan or personal loan, that’s multiple sets of fees and interest rates to stay on top of.

If you’re looking for ways to streamline your repayments and limit doubling up on ongoing fees and interest charges, one option that might be worth considering is a debt consolidation personal loan.

Rolling all your existing debts into a new personal loan could provide you with the opportunity to focus on paying down one single debt rather than trying to keep up with multiple. Personal loans also tend to have lower interest rates on average than credit cards.

It’s important to keep in mind, however, that while a debt consolidation loan can be a helpful tool that may allow you to better manage your debts, they will still amount to the same total once you roll them into one.

To help you get started on your personal loan comparison, RateCity has put together some of the top-rated personal loans for May 2021.

RateCity’s personal loan leaderboard ranks the top five personal loans using Real Time Ratings™, a world-first rating system that ranks products as you use the site, making them as up to date as possible.

(Rankings are correct at the time of publishing. Please note lenders may trade places on the list as interest rates and fees change and RateCity’s tracker reflects these movements.)

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