Debt consolidation means replacing several debts, such as a finance company loan, a Q Mastercard and a Gem Visa, with one new loan. It can lower your monthly payment, but that alone doesn’t mean you save money. Over 36 months it can save you hundreds or thousands of dollars; stretch the same loan to 60 months and you may pay more than you do now.
Enter your debts in the calculator below. It compares what you pay now with the new loan and tells you whether the switch saves money, only lowers your payment, or costs you more.
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Your current debts
The new consolidation loan
Now or with a consolidation loan
The calculation assumes you keep paying your current debts at the same monthly amount until the end, and that the new loan is a standard reducing-balance loan. The establishment fee is included. For credit cards, months left is an estimate: at the minimum payment it can be many years. Ask your current lenders for the payout figure and any early repayment costs.
Worked example: three debts, one loan
These are the calculator’s starting figures: a finance company loan, a Q Mastercard and a Gem Visa, replaced by one loan at 13.9% with a $250 establishment fee.
| Debt | Balance | Monthly | Months left |
|---|---|---|---|
| Finance company loan | $8,000 | $420 | 24 |
| Q Mastercard | $4,500 | $180 | 36 |
| Gem Visa | $3,000 | $120 | 36 |
| Total | $15,500 | $720 |
| Now | New loan, 36 months | New loan, 60 months | |
|---|---|---|---|
| Per month | $720.00 | $529.00 | $359.85 |
| Total repaid | $20,880.00 | $19,294.03 | $21,841.29 |
| Cost above the balance | $5,380.00 | $3,794.03 | $6,341.29 |
| Result | Saves $1,585.97 | Costs $961.29 more |
The 60-month loan halves the monthly payment, but you pay for it with two extra years of interest. Choose the shortest term you can comfortably afford.
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Store cards: what Gem Visa and Q Mastercard cost after interest-free ends
| Gem Visa | Q Mastercard | |
|---|---|---|
| Standard interest rate | 29.49% p.a. | 28.95% p.a. |
| Annual fee | $65 | $50 |
| Fee for an interest-free deal | $55 per deal | $55 for the first, then $35 |
Rates and fees as published in May 2026; check the current terms with the card provider.
Example: a $2,000 purchase on a Gem Visa, 24 months interest free, with $60 paid each month.
| Step | Amount |
|---|---|
| Paid in 24 months (24 × $60) | $1,440 |
| Left when interest-free ends | $560, now at 29.49% |
| Cleared over the next 6 months | $101.52 a month, $49.14 interest |
| Fees over 30 months: $55 deal fee + 3 annual fees | $250 |
| Cost of “interest free” | About $299 |
The fix is simple: divide the purchase by the number of interest-free months and pay at least that much. For $2,000 over 24 months, that is $83.34 a month. If a store card balance already charges 29%, it is usually the first debt to move to a cheaper loan.
Balance transfer card or consolidation loan?
Example balance transfer: $4,500 moved to a card at 0% for 6 months, reverting to 20.95% afterwards, with $250 paid each month. These rates are examples; offers vary by bank.
| Period | What happens |
|---|---|
| Months 1–6 at 0% | $1,500 paid off, $3,000 left |
| From month 7 at 20.95% | About 14 more months to clear, around $396 interest |
| Your situation | Better choice |
|---|---|
| One card debt you can clear within the 0% period | Balance transfer |
| Card debt bigger than you can clear in the 0% period | Consolidation loan with a fixed end date |
| A mix of loans and cards | Consolidation loan |
| You tend to spend again on cleared cards | Consolidation loan, and close the old cards |
| Fair or poor credit | Balance transfer cards are hard to get; compare loans in bad credit loans NZ |
Check the balance transfer fee, the revert rate and whether new purchases on the card are charged straight away.
Before you consolidate: checklist
- Ask each lender for a payout figure on a specific date. It can differ from the balance on your statement.
- Ask about early repayment costs. Lenders may charge a reasonable fee or an early repayment cost, especially on fixed-rate loans.
- Compare the total repaid, including the establishment fee and any monthly account fees, using the calculator above.
- Check who pays out your old debts. It is safest if the new lender pays them directly.
- Close or lower the limits on cards you have cleared.
- Get confirmation from each old lender that the account is closed and shows a zero balance.
- Check your credit file a month later to make sure the old accounts show as paid.
When consolidation backfires
| Mistake | What happens |
|---|---|
| Choosing the longest term for the lowest payment | You pay more in total, as in the 60-month example above |
| Keeping the cleared cards open and using them again | You end up with the new loan plus new card debt |
| Consolidating into a high-cost loan | A rate of 50% or more is usually dearer than the debts you had |
| Adding a car or home as security without reading the terms | You can lose the security if you fall behind |
| Applying with several lenders at once | Each application stays on your credit file for 4 years |
| Paying for “debt help” from a company that charges upfront | Free budgeting help gives the same advice without the fee |
Can’t get approved? Alternatives
| Option | What it does |
|---|---|
| MoneyTalks (0800 345 123) | Free budgeting help; a financial mentor can negotiate with your creditors |
| Hardship application | Ask each lender for lower payments or a pause if illness, job loss or another unforeseen event makes payments impossible |
| Payment plan | Agree lower payments directly with the card or loan provider |
| Work and Income | May help with essential costs so you don’t add new debt; see WINZ advance payment |
| KiwiSaver hardship withdrawal | A last resort in serious hardship; see how long it takes |
Need a smaller loan for one debt rather than several? See the $5,000 loan NZ guide, or compare bank rates in personal loans NZ.
Frequently asked questions
Does debt consolidation hurt my credit score?
The application adds an enquiry, but paying every month on time on one loan, and clearing card balances, can help your file over time.
Can I consolidate Gem Visa and Q Mastercard debt?
Yes. A personal loan can pay out both cards. Because their standard rates are close to 29–30%, they are often the most worthwhile debts to move.
Can I consolidate debt with bad credit?
Sometimes, but the rate may be too high to save money. Run your figures through the calculator before you apply.
Is a balance transfer better than a consolidation loan?
Only if you can clear the balance within the 0% period. Otherwise a loan with a fixed end date is usually safer.
What happens to my old cards?
They stay open unless you close them. Close them or lower the limits to avoid building new debt.
Conclusion
Debt consolidation in New Zealand pays off when the new loan has a lower rate and a term that is no longer than your current debts, and you don’t use the cleared cards again. A lower monthly payment alone is not a saving. Use the calculator, ask for payout figures, and if you can’t get a good offer, talk to MoneyTalks before you borrow again.
