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Debt Review and Consolidation Loans in South Africa
“Consolidation loans” is the go-to term when anybody is speaking about debt management these days. These is because consolidating your smaller debts with high interest rates can save you a lot on interest and make the monthly payment process much simpler. To consolidate your debt you have to apply for a new loan and this process is the same as with any other secured loan: you have to be approved by a credit provider.
Many people take out home equity loans in these cases to secure the lowest interest rates. This makes the risk bigger if you cannot service the loan. It is therefore not a quick decision and you should evaluate how much you can save on interest and if it will be worth the trouble of taking out a new loan and being more at risk of having your property seized in the event that you fail to repay the debt.
Debt Review in South Africa
Debt review has the same benefits in that you can save on interest and only pay a single amount to a PDA every month. Only over indebted consumers can qualify for debt review, so it’s great for those who are struggling with their debt responsibilities but can’t qualify for a consolidation loan. Consumers who are being pestered by debt collectors can breathe freely under debt review as their creditors are required to deal directly with the debt counsellor.
The debt review process in South Africa is not aimed at skirting around debt obligations, making the debt counsellor rich or using the law to avoid debt collectors. While debt review does protect you from debt collectors, the process is beneficial to creditors too. While debt counsellors receive a percentage of your monthly fee, debt review is first and foremost a way for over indebted South Africans to solve their debt problems.
Loans while under Debt Review
You cannot be extended loans or use any form of credit while under debt review. This is because debt counselling is aimed at getting you out of debt and it’s no use a debt counsellors restructured your payment plan, only for you to make more debt again. To move forward you have to change what you have been doing in the past.
Filling in the debt review assessment form is free and it’s a way for a debt counsellor to see if you would be a good candidate for debt review. Don’t hesitate to fill it in if you just want to know more about the benefits of debt counselling.
Our Professional, NCR Registered Debt Counsellors will provide you with a Free Financial Consultation
When you are under debt review you have made a commitment to not take on any more credits or loans until you are debt free
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