Kia ora, friends! If you’ve been feeling weighed down by debt, like you're constantly playing financial whack-a-mole just to keep up with bills, then I’ve got a story for you. A few years ago, I found myself exactly there—stressed, short on cash, and watching interest pile up faster than I could pay it off.

That’s when I first looked into consolidating debt in nz, and honestly, it changed everything.

In this post, I’m going to take you through my experience, how debt consolidation works, and what I’ve learned that could help you take back control of your finances. No fluff—just real talk, practical tips, and a bit of my own journey thrown in.

📉 My Debt Spiral

It all started innocently enough: a credit card for emergencies (which turned into online shopping), a car loan, and a few interest-free purchases that didn’t stay interest-free for long. Before I knew it, I was juggling:

• Two credit cards

• A personal loan

• A few Buy Now Pay Later accounts

• A balance on my overdraft

Altogether, I had just over $18,000 in debt. My monthly repayments were all over the place, with different due dates and interest rates. I wasn’t defaulting, but I wasn’t making much progress either. I was stuck in survival mode—paying the minimums just to keep the wolves at bay.

💡 The “Aha” Moment: Consolidating My Debt

One night, I was up way too late googling things like “how to get out of debt fast NZ” and “is it bad to take a loan to pay off debt?” That’s when I stumbled across the idea of consolidating debt. It sounded too good to be true at first: take all your debts and roll them into one manageable loan, ideally with a lower interest rate.

But the more I read, the more it made sense. I wasn’t trying to borrow more money to spend—I just needed a way to simplify and actually make progress.

🤔 What Does “Consolidating Debt” Actually Mean?

In plain English, consolidating debt means combining all your existing debts into a single loan. Instead of paying five different lenders, you just make one monthly repayment to one lender.

Here’s what it usually looks like in New Zealand:

• You apply for a personal loan (a debt consolidation loan)

• If approved, you use that money to pay off your existing debts

• You then repay just that one new loan—ideally at a lower interest rate and with better terms

It doesn’t magically make your debt disappear, but it does make it easier to manage. And if you do it right, it can help you save money and pay off your debt faster.

✅ Why Consolidating Debt Worked for Me

I ended up taking out a $19,000 loan to cover everything I owed. The interest rate was way better than my credit cards, and the loan term was 3 years. Suddenly, I had:

• One monthly repayment

• A clear end date

• Less stress

It didn’t happen overnight, but within a year I could already see the difference. I wasn’t just treading water anymore—I was actually moving forward.

1. Simplified My Life

I went from managing six repayments a month to just one. No more worrying about what was due when. I set up a direct debit and let it roll.

2. Lowered My Interest Rate

Credit card rates were chewing through my payments—some were over 20%. The loan I got was just under 10%. That meant more of my money went to the actual debt, not the interest.

3. Gave Me a Timeline

With revolving credit (like credit cards), it felt like I’d never be done. A consolidation loan gave me a set term—I knew exactly when I’d be debt-free if I stuck to the plan.

🔍 Things to Watch Out For

Consolidating debt isn’t a magic fix. There are a few traps to avoid:

❌ Taking on New Debt

Once I paid off my credit cards, I was tempted to use them again. But that would’ve defeated the whole purpose. I cut one up, and hid the other in a drawer.

❌ Ignoring Fees

Some loans come with setup fees or early repayment penalties. Always read the fine print. I nearly went with a lender that had a lower interest rate, but the fees would’ve cost me more in the long run.

❌ Not Budgeting

A consolidation loan only works if you budget properly. I built a new spending plan and stuck to it. It helped me avoid falling back into old habits.

🛠️ How to Start Consolidating Debt in NZ

If you're thinking about consolidating your debt, here’s how to get started:

1. Make a List of What You Owe

List every debt: the amount, the interest rate, the monthly payment, and who you owe it to.

2. Work Out the Total

Add it all up. That’s the minimum amount you’ll need to borrow if you want to wipe the slate clean.

3. Compare Loan Options

Look for:

• Fixed vs variable rates

• Term lengths (shorter = higher payments but less interest overall)

• Fees (application, monthly, or early repayment)

There are plenty of NZ lenders that offer personal loans for debt consolidation—just make sure you pick one that’s upfront and reasonable.

4. Apply and Get Approved

You’ll usually need:

• Proof of income (payslips or bank statements)

• A basic budget showing your expenses

• ID and proof of address

Once approved, use the funds only to pay off your debt.

5. Stick to Your Repayment Plan

Set up automatic payments and avoid touching credit while you repay the loan. Discipline now = freedom later.

🔄 Final Thoughts: You’re Not Alone

If you’re thinking about consolidating debt in NZ, I want you to know two things:

1. You’re not the only one in this position
   Lots of us have been there, especially with the rising cost of living and how easy it is to access credit.

2. It’s totally possible to turn things around
   Consolidation helped me reset my finances and reduce stress. It won’t solve everything instantly, but it’s a powerful first step toward taking back control.

The key is to be honest about where you’re at, make a solid plan, and choose the loan that fits you—not just the first flashy one you see.