Debt consolidation is a viable financial solution designed to consolidate multiple debt repayments (make all your debt into one) and, under some circumstances, save the debtor money. The process essentially involves taking out a single, new loan, at the lowest possible interest obtainable, to pay off multiple smaller debts.
Some of the most common questions people ask those in this particular financial sector are:
- “When are debt consolidation loans a good solution?”
- “How did I end up in this financial situation?”
- “How common are my financial problems? Is this just happening to me?”
The first thing to understand is that it’s not just happening to you, South Africa is in a serious economic state at this moment in time.
When is a debt consolidation plan a good idea?
Those who do not fully understand the intricacies of the system often state that taking out another loan to pay off previous loans doesn’t make sense…it obviously seems like a bad idea and often is – but it certainly can work out beneficially in some rare instances. If you have multiple creditors harassing you constantly, SMS’s, calls to your work, late at night, you friends and family (this process can be extremely unpleasant) and you want the calls to end, then a debt consolidation loan is the fastest solution. And, if it’s planned out very carefully, it can also be the most cost effective option.
Why not consider Debt Counselling over Debt Consolidation?
Sometimes the consolidation loans offered loan & financial institutions aren’t nearly enough to satisfy your debt obligations.
Instead of taking whatever the credit provider is able to offer you, which may not be enough to settle all of your creditor accounts leaving you ultimately trying to figure out how to pay the remaining; debt counselling could offer an option for those who would like to become debt free while being able to offer legitimate legal protection to ones assets such as your home or car.
Debt counselling provides the opportunity to bring your monthly debt repayments down by as much as 30 – 50% (but debt counsellors have been able to negotiate reductions as much as up to 60% in the past). Professional debt counsellors can negotiate lower interest rates and fees with creditors. The outcome is one affordable monthly installment, making provision for you to cover your normal living expenses as well.
With over 11 years of specialized experience in the debt & legal field Oyisa United Debt Specialists is committed to assisting South African consumers in financial liberation.