FIFO and DIDO debt consolidation: personal loan or home loan?

Debt consolidation is one of the most common money moves going. You roll several debts into one, so you make a single repayment instead of juggling five. Anyone can do it, and plenty of people should. This week we are aiming it at FIFO and DIDO workers, because the pattern fits them so neatly. Good money, and a driveway that fills up on the back of it. The ute, the second car, the boat, the caravan, a card or two from the quiet swings. The income covers the lot easily, yet spread across five lenders it can still feel tight. There are two main ways to pull it together, and which one you pick changes what it costs by a long way.

Can FIFO and DIDO workers consolidate their debts into one repayment?

Both routes do the same job. One new loan clears the rest, and from there you make a single repayment. What differs is the rate, the term, and whether you need equity. That difference is where the money is won or lost.

For most people these debts are not a sign of trouble. They are the normal kit of a good income. Consolidating just tidies them into one place and stops the money leaking out across several accounts.

Personal loan or home loan: which way should you consolidate?

The personal loan route is the simpler one. You leave the mortgage alone, and the loan is gone in a few years. The rate sits above a home loan but well below a card, so it still frees up real cash flow. Cards are the dearest debt most people carry, which is exactly why they are the first thing worth clearing. ASIC’s Moneysmart sets out how fast card interest builds in its credit cards rundown.

The home loan route is the cheapest by rate. You borrow against the equity in your home, and the debt joins your mortgage at home-loan rates, so the repayment drops right down. The catch is the term, and that is what the next section is about.

What does each option actually cost?

The numbers tell it better than words. These are indicative, on $35,000, and your real figures depend on your rates and balances.

Look at the bottom two rows. Same debt, same home-loan rate. Over thirty years it costs nearly $43,000 in interest. On a five-year split it costs under $6,000. The repayment is a little higher, but you are finished in five years instead of thirty.

The lowest repayment and the lowest cost are rarely the same loan. The gap between them can run to tens of thousands.

So what is the smartest way to structure debt consolidation?

This is the move most people miss doing it themselves. They consolidate into the mortgage, enjoy the lower repayment, and quietly pay that old car loan off for the next three decades. A separate split fixes it. ASIC’s Moneysmart makes the same point, that consolidating is not always cheaper and the structure matters, in its debt consolidation and refinancing rundown.

This is where working away helps. The income is strong, and while you are on swing, day-to-day costs are low. Clearing a short split becomes realistic in a way it is not for a lot of borrowers. How your pay is read feeds into all of it, which we cover in how FIFO income is assessed and getting a home loan on a 2 and 1 roster.

What do lenders look for before they will consolidate your debts?

On the personal loan side, lenders look at how you have run your existing debts and how steady the income is. A clean recent history makes it straightforward. On the home loan side, the equity in your property does the heavy lifting, so your loan-to-value position is the first thing weighed up.

The income read decides the rest. Rosters, site allowances and the way pay is structured are assessed differently from one lender to the next, and consolidation policy varies just as widely. We compare it across our 60+ lender panel and match your income and your debts to the lender that reads them best.

How do you set up a FIFO or DIDO debt consolidation from here?

1. Have a chat. Tell us roughly what you owe and what each repayment is. One conversation, nothing to prepare.
2. We run both routes. A personal loan and the home loan route, with the real monthly and total-interest numbers side by side.
3. We read your income the way lenders do. If you work a roster, we know how the allowances are treated, so we see what your pay is really worth.
4. We match the lender and the structure. The right lender across our 60+ panel, with the debt kept on a shorter split so it clears fast.
5. We handle the rest. Managed through to settlement, so you end up with one repayment and a clear finish line.

The bottom line

Debt consolidation is not the right call for everyone, and the cheapest headline repayment is not the cheapest loan. The right route, structured the right way, can save tens of thousands over the life of the debt. It is worth having someone run both options on your actual numbers before you commit. Done well it often clears the way for the next step too, whether that is buying, rentvesting from regional WA or using your equity to get ahead.