Westpac has launched a special debt consolidation loan interest rate as post-holiday debt mounts for many New Zealanders.

It comes as more Kiwis apply for debt consolidation personal loans to get on top of their out-of-control finances.

Westpac said today, customers will be able to borrow up to $70,000 for up to seven years, with a special interest rate of 11.95% per annum.

Sarah Hearn, Westpac NZ managing director of product, sustainability and marketing, said having multiple payments going out to cover multiple debts can feel overwhelming.

“Consolidating those repayments can help people take control of their money and make a plan to improve their long-term financial wellbeing,” she said.

“Over the past year we’ve seen an uptick in people applying for debt consolidation personal loans, as well as an increase in the amounts they’re asking for, which is consistent with the cost pressures we know people are feeling.”

A Westpac survey of 1087 customers found more than a quarter (28%) are concerned their holiday spending will cause financial stress in 2026.

Meanwhile, 19% of respondents said they would use debt to cover those costs.

Topping the list of additional costs in January and February were annual bills (35%), summer holiday (25%) and paying back festive season debt (19%), according to the survey.

Hearn said customers can use a debt consolidation loan to bundle their credit card, car, personal loan or other lending into one loan.

“After grappling with a few years of high costs, we think 2026 will be a better year for Kiwi families, and we want customers to start the year off on the right foot,” she said.

“The new year is a good time to take stock of your money situation, set some money goals for 2026 and draw up a plan to get there.”

But Jake Lilley, senior policy advisor at FinCap, told the Herald there were some “fishhooks” to be aware of when considering debt consolidation loans.

“You can get into those debt consolidation loans and move from unsecured to secured credit, depending on the terms,” he said.

“There’s also a bit of any issue that occurs at times where people get a debt consolidation loan but the other loans they’re consolidating aren’t completely closed off.”

Lilley said there were other options out there for people, including not-for-profits that offer debt consolidation loans on a no-interest loan basis.

“There might be also negotiation you could do, especially if there is a debt collector on your case,” he said.

How does Westpac’s rate compare?

Westpac’s debt consolidation loan interest rate of 11.95% is the lowest among major banks with a similar offering.

ANZ and ASB are both currently offering debt consolidation interest rates at 13.90% per annum.

Meanwhile, BNZ is offering personal loans for between $1000 and $60,000 at a variable interest rate of 12.90% per annum.

Non-bank lenders tend to offer steeper interest rates for debt consolidation, depending on size of the amount borrowed or an individual’s credit scorecard.

Harmoney is offering loans for debt consolidation for amounts of $2000 up to $100,000 with interest rates between 7.99-24.99%.

Money Sweetspot has an annual percentage rate of 16% on its “financial reset” loans of between $2500 and $40,000.

Gem is offering secured interest rates on a fixed personal loan from 8.99-28.99%, while Finance Now has personal loan interest rates of 10.95-29.95% for borrowing up to $60,000.