Settled Scenarios

DEBT CONSOLIDATION

Consolidating eight loans after a separation

A tradesperson left solely responsible for eight loans after a separation, with repayments slipping as rates rose.

$552k

LOAN AMOUNT

8 loans

CONSOLIDATED

$1,290

MONTHLY REDUCTION

THE STORY

The file, in three parts

What the broker brought, how the credit analyst read it, and what settled

01 · The challenge

A tradesperson sought to consolidate eight separate loans following a separation from his partner. The debts had been manageable across two incomes, but after the split he became solely responsible for all eight. He kept the repayments going initially, then rising interest rates tightened the position further and payments began to fall late or be missed. What had started as a workable structure had become eight due dates a month against one income.

02 · How VMG assessed it

Human underwriting looked at the sequence rather than the snapshot. The missed payments were traced to a defined change in circumstances followed by rate movement outside the applicant’s control, not to a pattern of conduct running through the file. Weight was given to the fact that he had continued to meet the commitments for as long as the position allowed, and to the steps he had taken to hold his financial position together since the separation. Consolidation was assessed on whether the resulting single repayment was genuinely sustainable on his income alone, which is the test that matters when eight facilities become one.

03 · The outcome

VMG settled a $552,000 consolidation, folding all eight loans into a single facility and reducing his monthly repayments by $1,290. One repayment, one due date, and a position he could hold on his own income.

THE TURNAROUND

Before and after

The same file, before the refinance and at settlement.

BEFORE VMG

Eight separate loans, and the applicant had sole responsibility after the separation.
Repayments increasingly difficult as rates rose.
Late and missed payments began to appear.
Eight due dates a month against a single income.

AFTER SETTLEMENT

All eight loans consolidated into one facility.
Monthly repayments reduced by $1,290.
A single repayment assessed as sustainable on his income alone.
Position stabilised rather than deferred.

💡THE VMG COMMON-SENSE ADVANTAGE

Eight repayments against one income is an arithmetic problem before it is a credit problem. Fix the arithmetic and the conduct usually follows.

HOW IT WAS ASSESSED

Human underwriting

Every file is read by a credit analyst, not scored by a system. There is no credit scoring, and no DTI or DSR ratio applied. The product and the terms depend on the individual file, so talk to your BDM about where a similar scenario fits.

Have a similar file?

Test the scenario with VMG credit before you lodge. VMG lends only through accredited mortgage brokers.

More settled scenarios

FUTURE INCOME STREAM

Using Future Business Sale Proceeds to Secure Property Purchase

Owner occupied purchase supported by PAYG salary and the remaining tranches of a business sale being paid out over five years.

$1.8m

LOAN AMOUNT

Owner Occ

SECURITY

5 years

SALE TRANCHES

LOW CREDIT SCORE

Consolidating seven loans on a low credit score

Seven loans consolidated for a borrower with a low credit score, all repayments current, after the file had been declined elsewhere.

$508k

LOAN AMOUNT

7 Loans

CONSOLIDATED

$525

MONTHLY REDUCTION

ATO DEBT

Refinance and ATO debt clearance on alt doc income

A couple refinancing an owner occupied property and clearing a growing ATO debt, with the self-employed applicant’s financials two years behind after illness.

$750K

LOAN AMOUNT

Owner Occ

SECURITY

2 BAS

INCOME EVIDENCE

QUESTIONS

Frequently asked questions

Will recent missed payments prevent a consolidation?

Not automatically. Credit will look at when the missed payments occurred, what caused them, and whether the consolidation actually resolves that cause. Arrears that trace to a specific event, with a structure that leaves the applicant demonstrably better placed afterwards, are assessed on their merits rather than filtered out by a score.

How many debts can be consolidated into one loan?

There is no fixed limit. What matters is the resulting position: whether the single repayment is serviceable, whether the security supports the borrowing, and whether the applicant is genuinely better off once everything is folded in. Files consolidating a large number of small facilities are common and are assessed on the outcome rather than the count.

Does a separation need to be finalised before a file can be assessed?

Not necessarily, though the position needs to be clear enough to assess. Credit will want to understand which liabilities the applicant is responsible for, whether any property settlement is outstanding, and whether anything could change the servicing position after settlement. Bring whatever documentation exists on the arrangement, even if matters are not yet concluded.

All applications are subject to Victorian Mortgage Group’s standard credit assessment and lending criteria. Terms, conditions, costs and charges apply. This article is general information only and does not take into account your objectives, financial situation or needs.

Consolidating eight loans after a separation

$552k

8 loans

$1,290

The file, in three parts

Before and after

Human underwriting

Have a similar file?

More settled scenarios

Using Future Business Sale Proceeds to Secure Property Purchase

$1.8m

Owner Occ

5 years

Consolidating seven loans on a low credit score

$508k

7 Loans

$525

Refinance and ATO debt clearance on alt doc income

$750K

Owner Occ

2 BAS

Frequently asked questions

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