Juggling multiple debts with bad credit can feel overwhelming. But debt consolidation could offer a solution—combining everything into a single, manageable payment. Here’s how it works in New Zealand, and how you can use it to start fresh, even with bad credit.

When you’ve got multiple debts, each with its own interest rate and due date, staying on top of repayments can feel impossible, especially if your credit score is already suffering. That’s where debt consolidation can help.

It’s a way to simplify your finances and get back in control. And yes—it’s still possible even if you have bad credit.

What Is Debt Consolidation?

Debt consolidation is when you take out one loan to pay off multiple other debts. Instead of making multiple payments (to a credit card, buy-now-pay-later account, personal loan, etc.), you make just one regular repayment on your new consolidation loan.

This can help:

• Lower your interest rate

• Reduce your total repayment amount

• Simplify your budget

• Avoid missed or late payments

Can You Consolidate Debt with Bad Credit in NZ?

Yes—but your options may be more limited. Traditional banks are likely to decline if your credit score is low, but specialist lenders (lsome of  our partners) may still approve a consolidation loan based on:

• Your current income and ability to repay

• Whether your debts are in default or not

• The total amount you’re trying to consolidate

• How recently you’ve had financial issues

What Types of Debts Can Be Consolidated?

• Credit card balances

• Store card or finance company loans

• Buy Now, Pay Later services

• Overdue utility bills

• Existing car or personal loans

Note: Not all debts can be rolled into a new loan—secured loans or debts under legal action may be excluded.

Car Finance as a Tool for Consolidation

In some cases, we can structure your car loan to include the consolidation of other smaller debts. This way, you drive away with a reliable car and a cleaner financial slate.

It’s not for everyone, but we assess it on a case-by-case basis.

Things to Watch Out For

• Be wary of short-term, high-interest consolidation offers

• Understand the full cost (interest + fees)

• Don’t use consolidation to create “more room” for spending

• Commit to staying on top of future repayments

Debt consolidation can be a powerful tool, especially when combined with good advice and a clear plan. At Sterling Car Finance, we’re here to support people with real-life financial challenges, not judge them.

Want to simplify your debts and start fresh?
Let’s talk about car finance with consolidation support.

 Call us at 0800 771 881
Visit Sylvia Park or Takanini
 Apply at sterlingcars.co.nz

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