Understand the costs, risks and alternatives

Debt Consolidation Home Loan Options in Perth

Managing several debts can involve different repayment dates, interest rates and account fees. In some circumstances, refinancing eligible debts into a home loan may simplify the repayment structure.

However, debt consolidation is not automatically cheaper or more suitable. Moving credit cards, personal loans or other shorter-term debts into a longer home-loan term can increase the total interest paid, even where the new interest rate is lower.

LnL Finance helps eligible homeowners across Perth review debt-consolidation refinancing options, understand the costs and consider whether the proposed structure may be suitable for their circumstances.

Request a Debt Consolidation Review

What Is Debt Consolidation?

Debt consolidation generally involves combining multiple eligible debts into one new or restructured loan.

Debts considered in a consolidation review might include:

Credit-card balances
Personal loans
Car loans
Store finance
Buy now, pay later accounts
Other eligible consumer debts

When debt consolidation is completed through a home-loan refinance, the new lending is generally secured against the property.

This means the lender may have the right to take enforcement action against the secured property if required repayments are not maintained.

Not every debt can or should be consolidated into a mortgage.

Debt Consolidation and Refinancing Are Related but Different

Debt consolidation

Debt consolidation is the process of combining multiple debts into one lending arrangement.

Refinancing

Refinancing involves replacing or restructuring existing lending, either with the current lender or another lender.

A home-loan refinance may include debt consolidation, but refinancing can also occur without consolidating other debts.

LnL Finance assesses the proposed home-loan structure, the debts being considered and the application under relevant lender requirements.

Potential Reasons to Consider a Consolidation Review

Depending on the circumstances, a review may help determine whether it is possible to:

Replace several repayment dates with one regular repayment
Review the interest rates charged across existing debts
Review account fees
Develop a clearer repayment structure
Establish a defined repayment plan
Review whether the existing home loan remains suitable
Close or reduce facilities that have been repaid
Consider whether the proposed repayment remains affordable

These are potential considerations, not guaranteed outcomes.

A lower required repayment does not necessarily mean the consolidation costs less overall. A lower repayment may result from extending the debt over a substantially longer period.

The Most Important Question: What Will You Pay in Total?

Before consolidating debt, compare:

The balances of the existing debts
Current interest rates
Current repayments
Remaining repayment periods
Early-repayment or discharge costs
New loan interest rate
New loan fees
Proposed repayment
Proposed repayment period
Total estimated repayments under the new arrangement

An arrangement with a lower rate can still cost more when repayment is extended over many additional years.

Converting Unsecured Debt Into Debt Secured Against Your Home

Credit cards and many personal loans are unsecured. This generally means they are not directly secured against a particular asset.

A mortgage is secured against property.

Consolidating unsecured debts into a home loan can therefore change the risk attached to those debts. If the mortgage repayments cannot be maintained, the secured property may be at risk.

This is a significant decision and should not be made solely because the new required repayment appears lower.

Extending Short-Term Debts Over a Mortgage Term

A credit card or personal loan may have a relatively short repayment period compared with a home loan.

If that balance is moved into a mortgage and repaid over many years:

Required repayments may decrease
The balance may remain outstanding for longer
Interest may be charged for longer
The total amount repaid may increase
The original debt may still affect long-term home equity

A repayment strategy may be required to avoid carrying the consolidated amount for the full remaining mortgage term.

LnL Finance can explain the proposed lending term and estimated repayments, but budgeting and debt-management advice may require assistance from a qualified financial counsellor or financial adviser.

Closing or Reducing Repaid Credit Facilities

Paying out a credit card does not necessarily close the account.

If a repaid facility remains open:

Further debt may be accumulated
The available credit limit may affect future borrowing capacity
The intended benefit of consolidation may be reduced
The borrower may end up with both the consolidated mortgage debt and new consumer debt

Account closure or limit reduction should be considered carefully in the context of broader financial needs.

How LnL Finance Reviews a Potential Consolidation

1. Understand the reason for the review

We discuss:

Which debts you want reviewed
Current balances
Current repayments
Interest rates and fees
Your home loan
Your property
Your income and expenses
Your preferred outcome
Whether any payments are overdue
Whether financial hardship assistance is required

If the situation is primarily one of financial hardship, a lender’s hardship team or free financial counsellor may be more appropriate than a new credit application.

2. Review the current debts

We may ask for current statements showing:

Account holder
Current balance
Credit limit
Interest rate
Required repayment
Payment history
Remaining loan term
Early-repayment costs

Use the approved secure document process. Do not upload account passwords, PINs or online-banking credentials.

3. Review the home loan and available equity

We consider relevant information such as:

Existing mortgage balance
Estimated property value
Proposed loan-to-value ratio
Current interest rate
Remaining mortgage term
Loan features
Available equity
Lender requirements
Potential lender’s mortgage insurance

Having equity does not automatically mean a consolidation application will be approved.

4. Assess affordability and lender requirements

The lender may assess:

Income
Expenses
Existing debts
Repayment history
Credit report
Loan purpose
Property valuation
Proposed repayments
Capacity to service the lending

Approval remains subject to full lender assessment.

5. Compare the existing and proposed arrangements

We explain relevant differences in:

Interest rates
Fees
Repayments
Loan term
Total estimated borrowing cost
Loan features
Secured and unsecured debt
Credit limits
Relevant conditions

6. Explain the risks and alternatives

Before proceeding, it is important to understand:

Whether the total cost may increase
Whether the repayment period will be extended
Which debts will become secured against the home
Which accounts are intended to be closed
Whether the repayment is affordable
Whether hardship assistance or financial counselling may be more appropriate

7. Prepare the application if appropriate

If the proposed lending appears suitable and you choose to proceed, we can assist with preparing and submitting the application.

When Debt Consolidation May Not Be Appropriate

A home-loan debt-consolidation application may not be suitable where:

You cannot meet essential living expenses
Existing repayments are already unaffordable
Mortgage repayments are in serious arrears
The fees outweigh the potential benefit
The new loan substantially increases the total cost
The new term extends the debt unnecessarily
There is insufficient property equity
Lender’s mortgage insurance materially increases the cost
The proposed repayment remains unaffordable
The property may be sold soon
Further debt is likely to be accumulated
There is no workable plan for closing or reducing old facilities
The underlying situation requires financial counselling or hardship assistance

A new loan is not a substitute for free financial counselling where a household cannot meet basic living costs or existing repayments.

Other Options to Consider

Before consolidating debts into a mortgage, options may include:

Contacting current credit providers

A lender or credit provider may be able to discuss:

Alternative payment arrangements
Temporary hardship assistance
Due-date changes
Interest or fee arrangements
Other support options

Availability and eligibility vary.

Requesting a home-loan rate review

A rate review may help determine whether the existing home lender is willing to change its pricing without a full refinance.

Learn About Interest Rate Reviews

Reviewing household cash flow

A clear record of income, expenses and debt repayments may identify where additional support or changes are needed.

A free financial counsellor can assist with this process.

Speaking with a free financial counsellor

The National Debt Helpline provides free, independent and confidential financial counselling on 1800 007 007.

Seeking legal advice

Legal assistance may be required where there are:

Debt disputes
Enforcement notices
Court documents
Joint-debt disputes
Relationship-separation issues
Questions about guarantees
Concerns about property rights

LnL Finance does not provide legal advice.

Debt Consolidation During Relationship Separation

Debt consolidation during separation can be especially complex.

Issues may include:

Joint home loans
Joint credit facilities
One party’s individual debts
Property ownership
Responsibility for repayments
Proposed property transfers
Discharge or refinance of a joint borrower
Family-law agreements
Valuations
Serviceability in one person’s name

Do not assume a lender will remove a borrower from a joint loan simply because the parties have separated or reached a private agreement.

Each borrower should obtain independent legal advice. Tax or financial advice may also be appropriate.

LnL Finance can assist with the mortgage application and lender process but cannot advise on legal rights or property settlement.

Debt Consolidation for Small Business Owners

Small business owners may have both personal and business debts.

A review may require consideration of:

Business loans
Personal guarantees
Tax debts
Credit cards
Equipment or vehicle finance
Business cash flow
Personal home-loan security
The purpose of each debt
Current financial statements
Lender requirements

The identifies the Small Business Debt Helpline as a free service for business owners needing independent support with business and personal debts.

Small Business Debt Helpline: 1800 413 828

LnL Finance does not provide business restructuring, insolvency, taxation or legal advice.

Why Choose LNL Finance?

Clear discussion of total cost

We consider the proposed rate, fees, repayment period and potential total cost rather than assessing only the new monthly repayment.

The risks are explained

We explain the significance of converting unsecured debts into lending secured against a home.

Refinancing is not assumed

We consider whether a rate review with the current lender, another lending structure or independent hardship assistance may be more appropriate.

Home-loan and refinancing experience

We assist eligible Perth homeowners with refinancing and debt-consolidation lending scenarios, subject to lender requirements.

Clear application support

Where refinancing is appropriate, we explain the required information, assist with the application and communicate with the lender.

Local assistance

LnL Finance is based in Joondalup and supports clients across Perth, Greater Perth and Western Australia.

Frequently Asked Questions

Debt consolidation involves combining multiple eligible debts into one lending arrangement. When completed through a home loan, the consolidated amount is generally secured against the property.
It may change the required repayment, but a lower repayment can result from extending the debt over a longer period. This may increase the total interest paid. Compare the full cost, fees and repayment term.
Not necessarily. The new fees, term and total amount repaid must also be considered. A lower rate over a much longer period can cost more overall.
Potentially, subject to lender requirements and your circumstances. This converts unsecured debt into lending secured against property, which changes the risk attached to that debt.
A home loan is secured against property. If consolidated debts are added to the mortgage and repayments cannot be maintained, the lender may take enforcement action against the secured property.
This depends on the circumstances and proposed arrangement. Leaving repaid facilities open may allow further debt to accumulate and credit limits may affect future borrowing capacity. The intended treatment of each account should be clearly discussed.
A lender may not approve a new loan where repayments are in arrears or the proposed lending is unaffordable. Contact existing lenders’ hardship teams and consider free financial counselling through the National Debt Helpline.
A formal credit application may involve a credit enquiry. Existing repayment history, defaults and other credit information may also affect a lender’s assessment.
Requirements vary by lender and application. Available equity depends on the property valuation, mortgage balance and permitted loan-to-value ratio. Lender’s mortgage insurance may also apply.
Potentially, but jointly held property and debts can create legal and lending complications. Obtain independent legal advice before changing property ownership or joint debts.
No. LnL Finance provides mortgage and credit assistance. Free financial counselling is available through the National Debt Helpline.
No. Approval is subject to lender criteria, affordability, credit assessment, property valuation and individual circumstances.

Request a Debt Consolidation Home Loan Review

If you have several eligible debts and want to understand whether home-loan refinancing may be appropriate, speak with LnL Finance.

We will review the relevant lending information, explain potential costs and risks and discuss whether an application or another next step may be appropriate.

Request a Debt Consolidation Review

Call (08) 6558 1898

If you are struggling to afford essential expenses or existing repayments, contact your lender’s hardship team or call the National Debt Helpline on 1800 007 007 for free, independent and confidential assistance.

LnL Finance
96 Reid Promenade, Joondalup WA 6027
(08) 6558 1898
info@lnlfinance.com.au

Compliance

Debt consolidation may increase the total interest paid and may convert unsecured liabilities into debt secured against property. If required repayments are not maintained, the secured property may be at risk. Lending eligibility, rates, fees and approval are subject to lender criteria and individual circumstances. LNL Finance provides mortgage and credit assistance and does not provide financial counselling, legal advice or crisis support.