A car loan may be included in a debt-consolidation loan, however the new lender decides which debts and payout amounts it will accept. A secured car loan needs extra checking because the lender may hold a security interest over the vehicle until the loan is paid out.
Can you consolidate a car loan with credit cards or personal loans?
Can you include a car loan when you consolidate your other debts? Sometimes, yes (the existing contract and the new lender's rules decide whether it can be paid out and included).
There is a little more to check than there would be with an ordinary credit card balance. Your car loan may be secured against the vehicle, its early payout figure may differ from the balance in your banking app, and fees may apply when it closes. Get the exact payout amount before comparing it with a new repayment.
A secured car loan gives the lender rights over the vehicle if you don't meet the loan agreement. The security interest can be recorded on the Personal Property Securities Register (PPSR). Paying out the loan should lead to that interest being removed, however you should confirm the process with the lender and make sure all the loose ends are tied off.
An unsecured car or personal loan doesn't use the vehicle as security. It can still have payout conditions and fees, but there is no vehicle security to release.
Your credit contract or statement should identify the loan type. If it isn't clear, ask the current lender:
Don't estimate the payout from the current principal alone. Interest can accrue between statement dates, and fees may be added when the loan closes.
It depends on the lender, the type of loan and your application at the time. Some debt-consolidation loans can be used to pay out several consumer debts, while others restrict eligible debt types or loan purposes.
The new lender may ask for a current statement, payout letter or account details for each debt. It may pay the existing lenders directly rather than sending the full amount to you. A car loan, credit card and unsecured personal loan can therefore need different documents even when they are part of the same application.
The amount you can borrow may also be less than the total you want to consolidate. If that happens, don't assume the highest-rate or largest debt will be paid first. Before accepting anything, confirm which debts the new loan would cover and which ones would remain.
Approval is never guaranteed. Lenders can consider your income, expenses, existing repayments, credit limits, repayment history and the information in your credit report. The rate offered may also differ from the advertised rate.
Start with a row for every debt you might include. Record the payout amount, current rate, repayment, remaining term and any fee for closing it. Then place the proposed consolidation loan beside the combined total.
| What to compare | Existing debts | Proposed consolidation loan |
|---|---|---|
| Amount owing | Current payout for each debt | Amount the new loan will actually pay out |
| Interest | Each current rate | Offered rate and comparison rate |
| Fees | Early payout or discharge fees | Establishment, ongoing and early repayment fees |
| Repayments | Combined amount and due dates | New amount and frequency |
| Time remaining | Remaining term for each debt | Full new loan term |
| Assets at risk | Car or other secured asset | Any asset used as new security |
| Total repayment | Current debts through to completion | Principal, interest and fees through to completion |
The monthly repayment may go down because the new term is longer. That can ease week-to-week pressure, however you may pay more interest because the debt stays open for longer. Model the proposed loan over its full term and compare it with the time and repayments left on your existing debts.
Put your car-loan payout, other balances, current repayments and the proposed rate, term and fees into the full or partial debt consolidation calculator. You'll see the change in your regular repayments and total cost separately.
Compare full consolidation with moving only selected balances.
Try the calculatorIncluding a lower-rate secured car loan in a higher-rate unsecured consolidation loan can make that portion of the debt more expensive. One repayment may be easier to manage, however simplicity does not automatically make the maths cheaper.
Suppose the car loan has $12,000 left at 8.5% while two credit cards total $8,000 at much higher rates (illustrative). A new unsecured loan at 13.99% would probably reduce the credit card rate, however it would increase the rate on the car-loan amount. Compare the full $20,000, including the fees and new term.
You don't necessarily have to include every eligible debt. Keeping the lower-rate car loan separate and dealing with the credit cards another way may cost less, however you would still have more than one repayment. Make that debt-by-debt comparison before applying so you know what you want a new loan to cover.
Paying out a secured car loan should end the old lender's security interest once the payout is completed and recorded. Keep the payout confirmation and ask when the PPSR record will be updated. If you plan to sell the car, check the register rather than assuming the update has happened.
If the new consolidation loan is unsecured, the car will not usually secure that new debt. If the new loan is secured against the car, your home or another asset, the risk continues under a different contract. Missing repayments could put that asset at risk, so consider the offered rate alongside the security you're providing.
Install WeMoney and connect your car loan, credit cards and personal loans to see all the balances and repayments beside your income and spending. This gives you the full financial picture before you request payout figures and helps show whether a consolidated repayment would fit alongside everything else.
WeMoney uses your connected accounts and credit information to show personalised savings opportunities in the For You section. These may include debt consolidation, credit-card payoff, personal-loan refinancing or car-loan refinancing where they are relevant to your position. Open the app to see your personalised opportunities, then replace any estimates with payout amounts and offer terms confirmed by the lenders. Potential savings and approval are not guaranteed.
If the car is essential for work or caring responsibilities, changing the security around it deserves particular care. A lower repayment doesn't remove the consequences of falling behind on a secured debt.
Where your current repayments leave too little for food, rent, utilities or transport, speak with the existing lenders' hardship teams before applying for another loan. The National Debt Helpline on 1800 007 007 is free, independent and confidential, and a financial counsellor there can help you work through car finance, credit cards and personal loans together without charging for the advice.
This article provides general information only. It does not take your personal circumstances into account and is not financial, credit or legal advice. Consider your own situation and seek advice from a suitably qualified professional if you need it.
The WeMoney digest: one email each week with what is worth knowing about your money. No noise, unsubscribe any time.
We collect your email to send you the weekly WeMoney digest and for no other purpose. You can unsubscribe via the link in every email. Handled under our Privacy Policy.
We'd love to share it, and you'll get $50 if we record your video testimonial.
Share your storyABN: 88 633 007 860 WeMoney Pty Ltd
Information on this website is general in nature and is not financial or credit advice. It does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for your circumstances, and read our Terms of Use, Credit Guide and Privacy Policy before acting on it.
All rights reserved.
Built with ❤️ in Australia
Australian Credit Licence (ACL): 526330
WeMoney acknowledges and pays respect to the past, present, and emerging Traditional Custodians of the land in which we live and work.
.png)
