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How-To Guide: Consolidate and Conquer - Is Debt Consolidation Right for You?

Written by HealthCarePlus | 20 October 2025

When money feels tight and you’re juggling several high-interest debts - maybe a couple of credit cards, a store card, or a personal loan - it’s natural to look for ways to simplify things. With interest rates beginning to ease, debt consolidation is back in the headlines as one possible strategy.

At HealthCarePlus, we’re not financial advisers, but we do keep an eye on trusted New Zealand sources such as Sorted, MoneyHub and MoneyTalks. Here’s what they say about how consolidation works, its potential benefits and the risks to watch out for.

Please note: This article is for general information only and is not financial advice. If you’re thinking about consolidating debt, speak first with a licensed financial adviser or a free financial mentor.

 

What Debt Consolidation Means

Debt consolidation means combining several debts into one new loan, ideally at a lower interest rate. Instead of making multiple payments to different lenders, you make one regular repayment.

According to MoneyHub, the idea is simple: if the new loan costs you less in total interest and fee and you don’t add new debt, you can become debt-free sooner.

Typical debts that can be consolidated include:

  • Credit cards
  • Store cards
  • Personal loans

Student loans and mortgages generally can’t be included.

 

Before You Consolidate: The Real Risks

All three major guidance organisations - Sorted, MoneyHub, and MoneyTalks - stress that consolidation only helps if your spending habits also change. Otherwise, you can end up in a deeper hole.

Here’s what to think about before you apply:

  1. It’s not always cheaper. A lower rate can still cost more if you extend the loan term too far.
  2. It can tempt you to spend again. Once old debts are cleared, those accounts look “empty.” Close or freeze them so you’re not tempted to reuse them.
  3. Fees can add up. Watch for set-up or early-repayment fees on both old and new loans.
  4. You could lose valuable protections. If you use your home as security, your house is now on the line for what used to be smaller debts.

Sorted’s debt calculator lets you compare scenarios before making any decision.
If you’re already behind on repayments or feel trapped, MoneyTalks offers free, confidential mentoring on 0800 345 123.

 

When It Can Help

Debt consolidation can make sense if:

  • Your new interest rate is significantly lower than your current debts.
  • You can keep repayments the same or higher, reducing your balance faster.
  • You’re disciplined about not taking on new debt.
  • The new loan term isn’t dramatically longer than your existing ones.

MoneyHub points out that even shaving a few percentage points off high-interest credit cards can save thousands over time but only when repayment behaviour improves.

 

Getting Help and Reliable Information

Before committing to any lender:

  • Use Sorted’s calculators to compare costs and repayment timelines.
  • Read MoneyHub’s debt-consolidation guide for independent comparisons of banks and credit unions.
  • Contact MoneyTalks for free, non-judgmental mentoring if you’re unsure where to start.

 

How HealthCarePlus Can Support You

Our aim at HealthCarePlus is to help members become financially resilient — not by offering loans or tools ourselves, but by connecting you to credible, independent support and practical education.

We regularly highlight trusted resources and partners that can help you:

  • Understand your options through guides from Sorted, MoneyTalks, and Consumer NZ.
  • Protect your progress with member-exclusive insurance offers that safeguard your income and wellbeing.
  • Stay informed through our Money Matters articles, which filter the financial noise and share advice grounded in real evidence.

Every step you take toward simplifying debt and improving your financial understanding contributes to long-term security and peace of mind.

 

Final Thoughts

Debt consolidation isn’t a one-size-fits-all fix and it’s not without risk.
But used thoughtfully, and with support from credible sources, it can be a constructive part of your journey toward financial resilience.

If you’re considering it, start with independent calculators and free advice first, then decide whether it genuinely helps your situation.

At HealthCarePlus, we’ll keep sharing reliable insights from experts you can trust, so you have the confidence to make the choices that work best for you.

 

 

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