For many Australians, managing debt has become a juggling act. Years of elevated living costs and three consecutive rate hikes have left households feeling like they’re spinning plates as they manage a growing mix of obligations that extend well beyond their mortgage repayments, from credit cards and personal loans to car finance, HECS/HELP debts, and tax liabilities.
Businesses are facing similar pressures, with high input costs placing severe strain on cash flow, limiting their capacity to invest, expand, and respond to new opportunities.
Against this backdrop, debt consolidation has emerged as an attractive strategy.
Borrowers can choose from a range of structures, including consolidating debts into a personal loan to manage multiple debts in one simple (and often, cheaper) repayment or – in some cases – even rolling debts into an existing mortgage.
But the core principle remains – by bringing multiple debts into a single repayment, borrowers can simplify their finances, improve cash flow, make budgeting feel more manageable, and, depending on their circumstances, reduce the overall cost of servicing their debt.
Older cohort
Over the past 12 months, one of the most notable developments in the debt consolidation space has been the evolving profile of borrowers seeking this solution. In particular, older borrowers are increasingly looking to consolidate their debts.
According to May 2026 credit data from credit reporting bureau Equifax, a growing number of older borrowers were taking out personal loans, driven not only by rising living costs but also by a desire to simplify increasingly complex debt obligations.
Unlike mortgage demand – which has been falling since the rate rising cycle – personal loan demand has remained relatively stable, according to Equifax, with borrowings among the 56-plus age bracket increasing by 11. 52 per cent year on year and the 46–55 cohort rising 5. 13 per cent over the same period.
A similar trend was observed in March 2026, when personal loan inquiries rose 9. 7 per cent year on year, driven by a 26. 7 per cent jump among borrowers aged 56 and over.
At the time, Equifax chief solutions officer Kevin James said the surge in older borrowers taking out personal loans was closely linked to a desire to streamline complex debt arrangements.
“As costs such as fuel and groceries rise, it appears more mature borrowers are looking to simplify their finances by folding multiple high-interest debts into a single, predictable monthly payment,” he said.
Specialist and non-bank lenders often play a key role in this space (see page 36), giving brokers the opportunity to structure solutions that not only address a client’s immediate needs but also help position them for a return to the mainstream banks in the future.
And the impact of these types of loans can be life-changing.
Speaking to The Adviser, Chris Moutzikis, co-founder and CEO of equity release brokerage Money at 60, says debt consolidation can deliver benefits that extend far beyond a borrower’s finances.
“When it is done well, the relief is as much emotional as financial,” he says.
“Bringing several debts into one manageable repayment restores predictable cash flow, and clients tell us the anxiety lifts because they can finally budget with confidence.”
However, Moutzikis cautions brokers against viewing these loans as a catch-all solution, saying they should be accompanied by an intervention that helps address the issues that led to the debt spiralling out of control.
“The best outcomes are paired with a reset, not just a refinance,” he says.
“The clients who do best treat consolidation as a fresh start and plan their cash flow deliberately alongside it, which is why we lead with education before any product conversation.”
Business case
The benefits of debt consolidation are not just limited to consumers.
For commercial finance brokers, it can also be an effective way to help clients improve cash flow and create greater flexibility within their businesses.
Craig Michie, group executive, client acquisition at ScotPac, says it is one of the areas where specialist non-bank lenders can help brokers deliver meaningful outcomes (see page 16).
“Our most recent deep dive into business sentiment found that 57 per cent of SMEs plan to use non-bank lending to fund new investment, and one in three businesses sourced non-bank lending in the past year to satisfy general borrowing needs,” he says.
The growing focus on cash flow is particularly relevant given current economic conditions.
Speaking on a recent episode of The Adviser’s In Focus podcast, Earlypay CEO James Beeson also commented on the importance of strategies like debt consolidation to address cash flow shortages, the leading contributor to business insolvencies in Australia.
“Brokers have an important role in advising business owners who are focused on running their business and may not have the headspace or time to consider other financial aspects that brokers are really good at,” he says.
“But in times like this, where it’s a challenging economic environment, the value that brokers can add is enormous because there’s a lot of stress with many business owners.
“For brokers to come in with experience and a fresh perspective and to be able to guide through this time, it’s a critical role. Just like their accountants and other advisers, brokers are front and centre. It’s an opportunity to think holistically about how they can support their SME clients. ”
Keeping it simple
As household and business budgets remain under pressure, debt consolidation is becoming an increasingly valuable tool in a broker’s toolkit.
Whether it is helping an older borrower simplify multiple debts or supporting a business owner seeking to improve cash flow, debt consolidation gives brokers another way to deliver meaningful outcomes while strengthening long-term client relationships.
