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Debt consolidation is the process of consolidating all of your debt and replacing each of your monthly payments with a single one.

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DEBT CONSOLIDATION: WHAT IS IT?

Debt consolidation is the process of consolidating all of your debt and replacing each of your monthly payments with a single one.

WHAT IS THE DEBT CONSOLIDATION PROCESS?

When it comes to consolidating their debt, South African customers have two main options. They have two options: submit an application for a consolidation loan or request to have their debts reviewed in accordance with The National Credit Act (NCA).

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Debt Review Removal

LOAN FOR DEBT CONSOLIDATION

A consolidation loan essentially amounts to one large loan to pay off all of your debts. Here are a few pointers to consider when you want a consolidation loan:

  • Actually, all you are doing is adding new debt to your old debt.
  • Due to the high-interest rates, consolidation loans are typically highly expensive.
  • On the consolidation loan, there will be an initiation charge.
  • You cannot be approved for a consolidated loan if any of your accounts are in arrears.
  • To be eligible to apply for a consolidation loan, you must have a good credit record.

CONSOLIDATION OF DEBT REVIEW

Utilizing the NCR-regulated debt review process is one of the finest solutions for debt consolidation.

  • At month’s end, you continue to pay just one sum.
  • You now have cheaper interest rates.
  • You now have a longer-term.
  • Your assets are shielded from repossession and you are spared the nuisance of debt collectors and creditors while making just one lower monthly payment.
  • Through debt consolidation, thousands of South African customers have achieved financial freedom.

HOW TO APPLY FOR DEBT REVIEW CONSOLIDATION?

Click here for the free online application for assessment or book an appointment with one of our professionals.

Book Here

WHAT THE DEBT CONSOLIDATION PROGRAM ENTAILS IS AS FOLLOWS;

It’s time to repair your debt now that you’ve enrolled in our Debt Consolidation program! You’ll have a lower monthly debt payment and legal protection.

Then, on your behalf, we will renegotiate with your creditors and arrive at a new, improved, and significantly reduced monthly repayment. We will then take your new monthly repayment plan/proposal and acceptances to a Magistrates Court so that a court order may be issued to make these new terms official.

Then, all that is left for you to do is make prompt and regular payments toward your new monthly arrangement. And we will make sure your money is properly allocated to your creditors.

We will give you and the credit bureaus a Clearance Certificate once your program has been completely finished. This means you will be classified as debt-free and can be able to obtain new credit in the future.

WHEN SHOULD A DEBT CONSOLIDATION LOAN NOT BE CONSIDERED?

  • You can’t afford the new loan payments until the loan is repaid.
  • You don’t clear all your debts with the loan instead you use the loan for something else.
  • Your new net interest rate is higher than your current net interest rate.
  • You end up paying more in total as a result of the monthly repayment being higher or the term of the agreement being longer.
  • It will cost you to consolidate. High-interest rates, once-off initiation fee, monthly admin fees, service charges, and more.

DEBT CONSOLIDATION LOAN VS DEBT REVIEW

DEBT CONSOLIDATION LOANDEBT REVIEW
Consolidates all your debts into one, with the need to take out one bigger loanConsolidates all your debts into one, without the need to take out one bigger loan
There is no legal protection of assets since there is no court order in place. If it’s a secured debt consolidation loan against your home you can lose your home if you miss repayments.Your assets are legally protected while under debt review in the form of a court order
The bigger loan granted to pay off the smaller loans is limitedThe amount of debt included under debt review is unlimited 
One of the prerequisites to qualify for the loan is having a good credit scoreCredit scores are not required to qualify for debt review
Makes sense when the interest rate that you pay for the consolidation loan is lower than you were paying before.Interest rates are lowered and the amount of debt decreases
Lower monthly installmentLower monthly installment
Household expenses are usually not coveredAll household expenses are covered. The repayment plan prioritizes covering all household expenses and the balance is channeled towards paying your debt
Debt consolidation doesn’t mean debt eliminationThe fact that you cannot borrow while under debt review means that you are eliminating debt when you pay your debt.
  

Table Source: Debt Sage


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