Could Debt Consolidation Help With Cost of Living?

2 min read

Jul 1, 2026 2:00:00 PM

Could Debt Consolidation Help With Rising Cost of Living?

The rising cost of living continues to be one of the biggest financial challenges facing Australian households.

Whether it's higher grocery bills, increased insurance premiums, rising interest rates or everyday expenses that simply seem to cost more than they did a year ago, many self-employed Australians and small business owners are feeling the pressure.

At Rate Money Marrickville, these are conversations we're having more often.

One topic that regularly comes up is debt consolidation.

While it isn't the right solution for everyone, it's one option that some homeowners explore to help simplify their finances during periods of rising living costs.

Why the cost of living is still affecting Australians

Household budgets remain under pressure.

According to the Australian Bureau of Statistics (ABS), household spending continues to be driven by increases across essential categories including food, housing, insurance and transport. Meanwhile, the Reserve Bank of Australia (RBA) continues to monitor inflation closely when making decisions about interest rates.

For many households, it's not one large expense creating pressure, it's the accumulation of several repayments alongside increasing everyday costs.

That might include:

Credit cards
Personal loans
Vehicle finance
Buy Now Pay Later accounts
Existing mortgage repayments

Managing multiple debts can quickly become difficult when each repayment falls on different dates and carries different interest rates.

What is debt consolidation?

In simple terms, debt consolidation involves combining several existing debts into a single loan.

Rather than managing multiple repayments each month, some homeowners choose to consolidate eligible debts into their home loan, resulting in one regular repayment.

For some people, this may:

Simplify household budgeting
Reduce the number of repayments to manage
Make cash flow easier to understand
Create greater visibility over monthly expenses

However, it's important to understand that debt consolidation doesn't reduce the amount you owe. It simply restructures how those debts are managed.

The Australian Government's MoneySmart guide to debt consolidation explains both the potential benefits and the risks that should be considered before making any decisions.

Is debt consolidation right for everyone?

Not necessarily.

Every financial situation is different.

For some borrowers, consolidating debt may help simplify repayments.

For others, it may not be the most appropriate option depending on their financial goals, existing loan structure or overall circumstances.

Some of the factors that may need to be considered include:

Your current financial commitments
Existing interest rates
Loan terms
Equity available within your property
Long-term financial objectives

That's why it's important to look at the complete picture rather than focusing on a single repayment.

What we're seeing in Marrickville

Many of the people we speak with across Marrickville, Sydney's Inner West and Western Sydney aren't necessarily looking to borrow more money.

They're simply looking for ways to make their finances easier to manage.

Whether they're self-employed, running a small business or balancing family expenses, they're asking practical questions like:

"Is there a simpler way to manage everything?"

Sometimes the answer involves debt consolidation.

Sometimes it doesn't.

The important part is understanding what options may be available before making any decisions.

Start with a conversation

If rising living costs are making it harder to manage multiple repayments, it may be worth understanding whether debt consolidation is something to explore.

At Rate Money Marrickville, we take the time to understand your overall financial picture and help explain the options that may be available based on your circumstances.

To learn more about debt consolidation, visit:

https://ratemoney.com.au/debt-consolidation

Or get in touch with Joe and the team at Rate Money Marrickville for a conversation.

Sources