How Sarah Saved $2,390/mo by Consolidating Credit Cards and Personal Loans

Sarah's situation

Sarah is a 38-year-old administration manager in regional NSW. She owns a home with her partner, valued at around $820,000. Their existing mortgage sat at $580,000 with a major bank.

Over the previous five years, debt had built up gradually. It started with a credit card balance that never quite got paid off. Then a personal loan for a car. Then a store card for furniture. Then another credit card to "consolidate" the first one - except the first one never got closed. A second personal loan followed when the hot water system failed. On top of that, she had been using Wagepay advances to bridge the gap between paydays - something that was costing her nearly $180 a month in fees alone.

By the time Sarah called us, she was managing seven different repayments across five lenders plus the Wagepay cycle. Her credit file showed a couple of missed payments on one of the credit cards from six months earlier. We see this every single day. Debt builds up gradually and before you know it, you are managing a mess of different lenders and due dates.

She was not in crisis. She was employed, earning good money, and her mortgage was current. But the combination of all those repayments was squeezing her household budget to the point where there was nothing left at the end of each month. One unexpected expense and the whole thing would start to wobble.

The debts

• Credit Card 1: $18,200 balance at a high credit card rate
• Credit Card 2: $12,400 balance at a high credit card rate
• Store Card: $4,800 balance at a very high store card rate
• Personal Loan 1 (car): $16,500 balance
• Personal Loan 2 (home repairs): $8,600 balance
• Wagepay advances: $5,500 outstanding, effectively costing $180/mo in fees
• Existing mortgage: $580,000

Total unsecured debt: $66,000.

Her combined monthly repayments across all debts including the mortgage came to $5,480. That is a significant portion of her household income, and it was barely making a dent on the principal of the credit cards.

Before and after: the numbers

That is $2,390 per month freed up, or roughly $28,680 per year in reduced repayments.

What we did

Step 1: Strategy call and full assessment

Sarah called us on a Monday morning. We spent 30 minutes going through everything - every debt, every balance, every repayment. No judgement. We handle files like Sarah's every single day. Debt builds up gradually and before you know it, you are managing a mess of different lenders and due dates. This is exactly what we do.

We pulled her credit file and confirmed the two missed payments from six months earlier. We also ran a valuation on her property upfront so we had a clear picture of her equity position before we went any further.

Step 2: Lender matching

Sarah had good equity, stable PAYG income, and only minor credit impairments. We compared five lenders and modelled the repayments for each. The difference between the best and worst option was around $180 per month - that is why lender selection matters. We know exactly which lenders handle these situations and how to present the file so it gets approved. We presented Sarah with our recommended option and explained exactly why it was the best fit.

Step 3: Application and submission

Sarah sent through her documents within 48 hours - payslips, ID, bank statements, existing loan statements, and credit card statements. We submitted the application on Wednesday of the first week.

Step 4: Approval and settlement

Conditional approval came back within four business days. The lender required closure of all three credit card accounts, the store card, and full payout of the Wagepay balance as a condition of approval. Sarah was relieved - she wanted them gone anyway.

Settlement was coordinated with the solicitor. At settlement, the new lender paid out the existing mortgage, both personal loans, the Wagepay balance, and all card balances directly. Sarah did not receive any cash. Every dollar went to clearing debt.

The outcome

The morning after settlement, Sarah had one loan and one repayment. No more credit cards. No more personal loan direct debits. No more Wagepay cycle. No more juggling five different due dates.

Her monthly outgoings dropped from $5,480 to $3,090. That $2,390 per month in breathing room meant she could start building an emergency savings buffer for the first time in years.

We also structured the loan so that Sarah could redirect a portion of her savings back into additional repayments. As the Australian Government's Moneysmart website notes, making extra repayments after consolidation is one of the most important steps to avoid paying more over the long run.

The long-term plan

We set up a plan for Sarah to put $500/mo of her savings into extra repayments. At that rate, instead of a 30-year loan term, the entire mortgage would be paid off in approximately 22 years - saving over $180,000 in total interest.

We also set a 6-month check-in to review her position and explore whether a further rate improvement was available once the minor credit blemishes had aged out.

Timeline

1. Week 1 - Strategy call, documents, and valuation
   Full assessment of debts, income, property value, and credit file. Sarah knew by the end of the first call that consolidation was viable and roughly what the saving would look like. She gathered payslips, ID, bank statements, and all loan and card statements. We ran the property valuation and sent through the lender comparison.
2. Week 2 - Application submitted, conditional approval
   We submitted to the best-fit lender with all supporting documents. Conditional approval came back within four business days. Conditions included closing all credit cards, the store card, and paying out the Wagepay balance at settlement.
3. Week 3 - Conditions met, formal approval, settlement
   All conditions cleared. Settlement coordinated with the solicitor. All debts paid out. One loan, one repayment, one plan. Done.

Key takeaways

• Credit cards, personal loans, and short-term advances like Wagepay are some of the most expensive debt you can carry. Consolidating them into a home loan can dramatically reduce your monthly outgoings.
• Minor credit impairments (like a couple of missed payments) do not automatically disqualify you. We know exactly which lenders handle this and how to present your file.
• Card closure is typically a condition of approval, and it is one of the best safeguards against re-accumulating debt.
• The structure matters. Making extra repayments after consolidation is critical to reducing the total loan term and avoiding higher total interest over the life of the loan.
• The right lender can save you hundreds per month compared to the wrong one. Lender selection is not a minor detail. We have seen hundreds of files like this and we already know the answer.

For a deeper look at how refinancing to pay off credit cards works, including the risks and what to watch out for, see our full guide: Can I Refinance My Home Loan to Pay Off Credit Card Debt?

Related guides

• Refinance to pay off credit card debt - the full mechanics, savings, and risks explained
• How does debt consolidation affect your credit score?
• Debt consolidation with bad credit