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Debt Consolidation In South Africa
What Is Debt Consolidation?
If you’re buried under your credit card bills, it can seem like there’s no way out. This feeling of hopelessness can make you want to throw in the towel and take on even more debt through a loan or another credit card – which will only put you deeper in the hole. But there is an option that can help you get out of debt faster than what you may be thinking: debt consolidation . But how does debt consolidation work, and should you consider it? Let’s look at how to use debt consolidation to get out of debt fast – without going deeper into debt!
How Does Debt Consolidation Work?
Debt consolidation is a way to pay off your debts by having one monthly payment. There are different ways you can use debt consolidation to pay off your debt. In most cases, this involves borrowing money from a creditor and signing a new repayment plan with them. Some creditors also offer balance transfers that can help you get out of debt faster. These balance transfers will offer an interest-free or low-interest period for the duration of the transfer and help you save on credit card interest charges in the meantime.
Choosing the Right Company
The first step is to find a debt consolidation company that will work with you. Try not to go with the company that advertises heavily or has multiple customers in the office, they may be cheaper but they don’t care about your best interests.
Short-Term vs. Long-Term Relief
One of the quickest ways to get out of debt fast is by consolidating your debt into one monthly payment. For short-term relief, this is usually a good option because it is easier to pay off a single larger bill. Long-term relief involves paying less each month and being more strategic with the amount you are putting towards your debts every month so that you can afford your monthly payments. This allows for lower interest rates and higher odds of success in getting out of debt.
Pros and Cons of Debt Consolidation
Debt consolidation is not the perfect solution for everybody. However, it can be an effective way to pay off debts and get back on your feet. Before considering debt consolidation, you should ask yourself whether or not you are in a position to consolidate your loans and use the money as well as if you have any alternate solutions available.
Additionally, you should research other debt relief programs so that you have a list of viable options at hand when trying to manage your debt situation.
Using a Personal Loan to Consolidate Credit Card Debts
Consolidating your credit card debt with a personal loan can help you pay off the debt more quickly. You will have to make one monthly payment for the duration of the loan, and each month’s payment will be applied first to credit card debts before it goes towards other forms of debt. Additionally, most personal loans offer a lower interest rate than what your credit cards are charging you, meaning you can save money by paying off your balances more quickly.
The Best Way to Manage Your Loans After Consolidating Them
If you’re looking for the best way to manage your loans after consolidating them, one thing to keep in mind is that consolidated loans can seem worse at first. You’ll need to pay all of your bills on time and a lower monthly payment, but it’s possible that you’ll feel more trapped and stressed with all of your money tied up. Eventually, once you pay off some debts, it may become more manageable.
FAQ'S
Frequently Asked Questions
While debt review can be a lifeline for an over-indebted consumer, it should not be entered into lightly. Over-indebted consumers need to be aware that, once they enter debt review, they cannot apply for new credit and it cannot be exited until all the debts are settled.
How long the debt review process lasts depends on a number of things, such as the amount of debt that you have and how much you can afford to repay, amongst others. Typically, it takes 36 – 60 months to complete the process, be declared debt-free, and get your clearance certificate.
After your initial assessment with a debt counselling company, you may be informed that your current situation does not qualify you to go under debt review. Some of your accounts, especially those which have been subjected to legal action, may be excluded. Your debt may take longer to repay.
Debt review is a legal process, and your payment plan has been accepted by all your creditors. A court order has also been granted. If you default on your plan, you are breaking your agreement and your creditors are within their rights to initiate legal proceedings.
Q: I want to remove my name under debt review but have not finished paying my debt. Is it possible? Yes, this can be done if your debt review was made an order of court and the court order is subsequently rescinded OR an application is made to court to have you declared “not over-indebted.”
The process shall be completed within 15 minutes in which you will be advised of the appropriate action to terminate your debt review and clear the flag from your credit records. The once-off Assessment fee of R85 is payable upon submitting the service request form and the assessment process will commence immediately.01 Jun 2020
How long the debt review process lasts depends on a number of things, such as the amount of debt that you have and how much you can afford to repay, amongst others. Typically, it takes 36 – 60 months to complete the process, be declared debt-free, and get your clearance certificate.
About Us
We are a debt counselling / debt review company based in Durban, South Africa. We help South Africans get out of debt fast. Contact us for a free debt assessment.
