Debt Consolidation › Does consolidating debt actually save money?

Does consolidating debt actually save money?

It can lower your monthly repayments and your interest rate, which helps cash flow. Whether it saves money overall depends on the term. Spreading a short debt across decades can increase total interest even at a lower rate.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

This is the part people miss. A lower rate looks like a clear win, but if a three year car loan is stretched over twenty five years of mortgage, the total interest can be higher despite the lower rate. The fix is to keep paying extra so the consolidated amount clears faster. Then you get the cash flow relief and the saving.

The key points

It usually lowers the rate and monthly repayment.
Total interest can rise over a long term.
Keep paying extra to clear it faster.
Cash flow relief and saving can both be had.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.