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Millions of South African consumers are struggling to keep up with their debt repayments. This is why credit providers and lenders have introduced a loan solution called debt consolidation.
This involves getting one large loan to settle multiple smaller debts, leaving you with only one monthly payment to manage. This sounds great, but it’s important to get a quote before taking out this type of loan.
What is a Consolidation Loan?
A debt consolidation loan is a personal loan that’s granted to pay off multiple smaller loans, credit cards and outstanding accounts. This gives you one payment each month and just one debt account to manage. It’s easier to monitor monthly repayments when they’re limited to a single amount and a shorter term. It also reduces the overall cost of debt payments by lowering interest charges.
There are various types of debt consolidation loans available in South Africa, including secured and unsecured ones. Secured debt consolidation loans are pep loans for sassa backed by an asset such as your home, which means you could lose your property if you fail to meet your repayments. Unsecured debt consolidation loans are not backed by any assets and only cover your existing unsecured personal debt.
If you’re thinking about taking out a debt consolidation loan, make sure to compare interest rates and fees from several credit providers before applying. The best way to do this is by using an online comparison tool.
If you’re serious about reducing your debt, speak to an accredited debt counsellor about your options. They can help you create a plan for getting out of debt and advise you on how to avoid the risk of getting into more debt in the future. Debt review is a non-loan option that can stop creditors from contacting you and temporarily suspend your debt accounts.
Why Consolidate Your Debts?
When debts are spread out over multiple credit accounts it can be difficult to manage. Debt consolidation allows all debt exposures to be moved into a single loan that is repaid over an agreed period of time. This is usually done to reduce monthly repayments and to improve overall cash flow.
A debt consolidation loan can also save you money when it comes to service fees and interest rates. By moving the debt to a new account with different terms and conditions it is possible to get more competitive rates that are affordable. This can make a huge difference in the long run, especially for high cost forms of credit like credit cards and micro loans.
If you’re unsure if a debt consolidation loan is the right move for you, consider speaking to a debt counsellor. These professionals are able to work with creditors and set up an affordable payment plan that could include taking out a debt consolidation loan.
Remember, though, that debt consolidation should be used as a tool to help you overcome financial and credit problems, not as an excuse to continue spending money. If you don’t change your spending habits and stick to a game plan for paying cash, it could end up being a case of Sisyphus rolling the boulder up the hill day in, day out, without any real progress being made.
Consolidation Loans in South Africa
Many South African consumers are overly indebted and struggling to manage their debt repayments. This is why many credit providers have introduced debt consolidation as a debt solution. It is a way for consumers to combine their various debts into one debt payment, often with a lower interest rate and more manageable terms.
However, the process of consolidating debt is not without its risks. In fact, it is important for borrowers to be aware of the pitfalls when applying for a debt consolidation loan. It is also essential to carefully consider the reasons why you went into debt and what your financial goals are. This will help you make an informed decision about whether debt consolidation is right for you.
A debt consolidation loan is a great way to reduce multiple monthly payments and improve cash flow. It can also be used to pay off high-interest credit cards and settle smaller debts like store accounts. This will save you money on your monthly instalments and can improve your debt repayment history and credit record.
To apply for a debt consolidation loan, you will need to provide a clear copy of your ID document, proof of income, bank statements and proof of your outstanding debt accounts. You will also need to provide an address and a contact number where you can be contacted. It is also advisable to have credit life insurance in place which will cover the amount you are borrowing in the event of death, disability or permanent incapacity.
African Bank
If you’re struggling with debt and finding it hard to keep up, you may need help. Debt consolidation loans are one way to pay off your debt and save money on interest. However, you should be sure that the institution you are applying to is a reputable and trustworthy one. A good place to start is by reading reviews on the internet.
African Bank has a reputation for being transparent with their clients when it comes to their lending practices and policies. They also understand that everyone’s financial situation is different and that is why they treat their customers with respect and dignity. They strive to put themselves in their customer’s shoes and understand what they are experiencing in order to better assist them.
If you are looking for a consolidation loan in South Africa, it’s easy to apply online with African Bank. You will need to provide proof of income, your ID and a recent bank statement reflecting three salary deposits. They will then run credit checks and get back to you with a decision. They can then offer you a debt consolidation loan of up to R250 000. The repayment terms can be between 12 and 72 months and you’ll have just one payment to manage each month. This makes it easier to manage your debt and day-to-day living expenses.
