Understanding Debt Consolidation Loans in South Africa

What are debt consolidation loans and how can they help?

If you have more debt than you can handle, it might be time to consider some form of debt relief! While South Africa offers a variety of debt relief options, we''ll help you find the best solution that fits your needs and maximizes your potential.

One good option for relieving pressure is a loan repayment schedule that incorporates an interest-only schedule and/or possibly deferred payments based on your ability to pay off the principal and interest that builds up over time.

What is a debt consolidation loan?

A debt consolidation loan is a fantastic option for anyone who has a number of debts to pay off that’s just too much for one person to handle. Instead of having a bunch of small payments, you’ll have a single larger one.

This reduces stress because you’re paying less each month and will help you get back to living your life as soon as possible since the repayment time period will likely be longer as well! It may not be as exciting as getting something brand new, but it sure is worth it when you need it most!

How does it work?

When you apply for a consolidation loan, the creditor will combine all your debts into one new account. You’ll then be responsible for making one monthly payment instead of many. However, this may cause the principal amount on your loan to increase since it combines several loans with lower balances into one loan with a higher balance. If you choose to do this, make sure that the increased cost isn’t more than you can afford before signing!

Advantages of debt consolidation

  1. Lower interest rates
    Consolidation loans could have lower interest rates because they are often given to people who are struggling financially. It also means that the interest rate will be higher for other loans.

  2. Single monthly repayments
    Consolidating your debt means that you pay a single company one monthly fee to be on time with your bills, rather than paying several individual companies on time every month. Escape from the vicious cycle of paying on all your debts and wasting money and effort.

Disadvantages of debt consolidation

  1. Falling deeper into debt
    Debt consolidation is not necessarily the easiest or best solution to all of your money problems. Once your debt payments have been consolidated, you might think that all your problems are solved, but they''re still there just around the corner. One example is that creditors may start offering you new loans, putting you further into debt than before.

  2. Consolidation loan scams
    Some unscrupulous creditors market their services to those who are desperate to change their financial situation, like you! These creditors may offer very high-interest rates, unnecessarily elongating your loan repayment period and charge penalty fees for missed payments just because they want an excuse to be jerks.

  3. You may not qualify for a consolidation loan
    Debt consolidation loans are a type of loan that takes all of your debts, including your credit cards, mortgage payments, personal loans and lines of credit for example, and arranges them into one loan for you to repay over time. Though consolidation loans have gotten increasingly popular in recent years, not everyone is eligible to apply for or receive this type of loan.

Debt consolidation loans are a loan given to a borrower who has a number of different debts owed to their creditors. By consolidating these debts into one loan, borrowers can often enjoy lower monthly repayments and a reduced overall interest rate.

With a debt consolidation loan , the borrower has only one monthly repayment to make, rather than several. However, debt consolidation loans can be risky for some borrowers, and they''re not always the best option. In this blog post, we''ll discuss some of the pros and cons of debt consolidation loans , and some alternatives if debt consolidation loans aren''t right for you.

  • 10 common credit score myths.
  • 5 ways to pay your credit card debt.
  • 8 most common credit terms.
  • A Guide On How To Get Out Of Debt.
  • Blacklisting, is it still a thing?
  • Breaking Bad Debt.
  • Build Your Credit Score While You’re Young
  • Can I Get A Loan While Under Debt Review?
  • Can Your Credit Score Affect Your Job?
  • Check Your Credit Report For Signs Of Fraud
  • Common myths about debt review.
  • Debt Management Tips.
  • Debt Review Is A Good Idea.
  • Default, Judgement, Sequestration.
  • Disputing Errors on Credit Reports
  • Free VS Paid Credit Reports.
  • Frequently Asked Questions about Debt Review.
  • Get your credit report before applying for a loan.
  • Get Your Credit Score Back On Track
  • Good Debt Can Build Your Credit Score.
  • Hard VS Soft Inquiries On Your Credit Report.
  • Have I Been Blacklisted?
  • How do I get late payment entries removed?
  • How Do I Manage My Debt When I Am Unemployed?
  • How do I read my credit report?
  • How is your credit score calculated?
  • How Is Your Credit Score Weighted?
  • How Long Does Debt Review Last?
  • How To Calculate Your Debt-To-Income Ratio.
  • How To Clear Your Name At Credit Bureaus.
  • How To Improve Your Credit Score After Debt Review.
  • How To Qualify For New Credit With No Credit Score.
  • How To Reduce And Eliminate Debt.
  • Judgements, Administrations and Listings
  • Online Shopping – Just (don't) add to cart!
  • Teaching Children Good Money Sense.
  • The Best Way to Manage your Store Credit Card Account
  • The Pros And Cons Of Debt Counseling.
  • Things You Don't Want To See On Your Credit Report.
  • Tricks To Help You Save While Paying Off Debt
  • Understanding a credit report in South Africa.
  • Understanding Debt Consolidation Loans in South Africa
  • Vehicle instalments driving you to despair
  • Warning Signs You Could Be Heading for Financial Disaster
  • What Affects Your Credit Score?
  • What are credit bureaus and how do they work?
  • What causes credit card debt?
  • What do credit bureaus know about me?
  • What Effect Does Your Credit Report Have On Your Interest Rates?
  • What Happens To Your Credit When You Get Married?
  • What Happens When I Skip A Debt Payment?
  • What Happens When You're Debt Free?
  • What is a credit score?
  • What is a credit utilization rate?
  • What Is A Decent Credit Score To Buy A Car?
  • What Is A Good Credit Score If You Want To Buy A House?
  • What Is A Hard Inquiry And How Does It Affect Your Credit Report?
  • What Is A Soft Inquiry And How Does It Affect Your Credit Report?
  • What Is Considered A Bad Credit Score?
  • What is considered a good credit score?
  • What Is Debt Administration?
  • What Is Debt Counseling?
  • What Is Debt Review?
  • What’s the difference between your credit score and your credit report?
  • Which Type Of Credit Carries The Most Risk?
  • Why Debt Counseling Is Perfect For You.
  • Why Did My Credit Score Go Down?
  • Will checking my credit report affect my credit score?
  • Your Best Defence Against Identity Theft Is Your Credit Report
  • Your Credit Score: The Basics.
  • Show More

    Check for arrears accounts

    In order to help you on your way to Credit Health, we've teamed up with Transaction Capital Recoveries and MBD Inc. By selecting continue, you give consent that we may check for any arrear accounts on your behalf.

    Funeral Cover Application

    You will be redirected shortly to complete the signup process

    If you are not redirected, click here.