Which is best, a debt consolidation loan or a personal loan balance transfer?

Published 16 May 2024

It depends on your circumstances. The point of balance transferring a personal loan is to take advantage of a card’s zero-interest introductory offer. Provided you are confident you can repay the loan in full during the zero-interest period, you can save heaps by avoiding interest charges altogether.

But if you think there’s a strong chance you may not repay all of the loan in time, you could end up losing everything you have gained by having to pay the revert interest rate (which may be as high as 21% p.a.) on the remaining balance. In this case a low-interest debt consolidation loan, which applies interest from day one, may be a better option.