South Africa Debt Consolidation Loan Or Debt Advisory

What should you do if you have multiple debt accounts and it is difficult to repay them every month? Perhaps you have considered debt consolidation loans, but is this the right choice for you?

1. What is debt consolidation loan

Consolidated loans can consolidate all smaller loans into a larger loan amount. This means that all your small debts, such as your credit card debts, store debts, personal loans, etc., will now be big loans.

Now it is only paid once a month, rather than several creditors. By consolidating your debt, you will get a new loan contract. Creditors generally extend the repayment period and lower the interest rate.

Consolidated loans simplify the financial situation, but in the long run, more debt will eventually be paid. This does not mean that debt consolidation loans can get rid of all debts. If you don’t have good capital management skills or financial plans, the cost of debt consolidation loans will be higher in the long run.

Most people will spend money recklessly when they apply for consolidated loans. Because consumers do not know how to manage their funds, even consolidated loans are useless.

Is debt consolidation loan suitable for you

It depends on your credit score and financial situation.

Consolidated loansvery goodsituation:

• Your total debt does not exceed 40% of your total income(excluding mortgage loans)

• Your credit score is good enough to apply for low interest consolidated loans.

• You can pay your debts every month at any time.

• You plan to prevent you from going into too much debt.

Consolidated loansI’m not happyIf you have too much spending habits or are overwhelmed by too much debt, you can choose. If you have difficulty managing your money or bad consumption habits, in the long run, consolidated loans will cost more money.

If your total debt exceeds half of your income, the consolidated loan is not worth it. If you are looking for financial relief, there is a better financial solution.

2. The best choice for debt integration is debt consulting

If you are not consolidating debt through debt consolidation loans, but trying to maintain balance of payments, you should consider debt issues.

What is debt consulting

Debt advisory or debt review provides financial relief to South African consumers who are trying to repay their debts. In 2007, the National Credit Act(NCA) introduced a debt review procedure to prevent consumers from being blacklisted.

For consumers who are unable to pay all their debts and monthly living expenses, debt review is the perfect solution. These consumers’ monthly expenditure exceeds their income, which means they may be over indebted.

Debt counseling is for you. If:

• You have a steady income.

• You can’t make ends meet because of debt

• You can’t pay your debts. You’ll get further into debt

Why debt consulting is better than debt consolidation loans

Debt consolidation loans provide a simpler way to repay debt, but may eventually pay more. If you don’t have financial discipline to manage your funds, consolidated loans will make you more indebted. Debt negotiations can be a better option.

If you are struggling to pay your bills every month, debt counseling can help you regain control of your financial situation and get out of debt. Debt advisers, such as debt structures, can provide the economic relief you want.

What are the benefits of debt advisory

• Legal protection of creditors

• Comprehensive communication with credit suppliers

• Negotiate with credit providers to pay and cut interest rates

• Reconcile liabilities in one month

• Customize the budget according to customer needs

Legal protection of creditors

Living with debt, especially when threatened by creditors’ legal proceedings, will bring great pressure. Once you accept debt consultation, you will be protected by NCA, so you don’t have to worry about being bullied by credit providers. Your debt adviser will take over the responsibility and communicate with all creditors on your behalf.

Negotiate with credit providers to repay and lower interest rates

Your debt adviser will negotiate again on behalf of you to reduce the interest rate and extend the repayment period. By renegotiating these terms, you will pay lower debt repayments each month, so use some extra cash for living expenses.

You only need to pay off debts once a month

Your debt adviser will restructure your debt. This way you only need to pay off the debts you have reduced once a month. If the debt is paid only once a month, it is easier to manage financial liabilities every month.

Customizing the budget according to customer needs

As part of the debt review process, the debt adviser must submit expenditure on a monthly basis in order to reallocate expenditure requirements. Debt advisors provide personalized monthly budget plans to help you manage your funds more efficiently.

Is debt consulting the best solution

The debt structure will assess your situation to determine whether you are eligible for the debt advisory process. If this is not the best solution, I will suggest other options in the future.

There are 10 signs that you may need to consider debt to help you.

1. Your overdraft/credit card is used up.

2. You have defaulted on more than one payment.

3. You don’t have enough money to pay for living expenses.

4. Unable to save.

5. You don’t have an emergency fund.

6. You sell assets to make ends meet.

7. Creditors call to ask about your debt repayment.

8. You get a loan on the day of your payday.

9. You borrow money from your retirement savings.

10. You lose sleep because of your financial pressure.

3. Advantages and disadvantages of debt consolidation loans

Let’s take a look at the advantages and disadvantages of accepting debt consolidation loans.

Advantages of debt consolidation loans

Low month installment

Monthly installments are low. But there is a price. Low monthly installments mean extending the loan term. You will eventually pay more interest. In the long run, it will cost you a lot of money.

Easy payment tracking

Because you only need to pay in installments once a month, it is easy to track debt repayment and pay in time.

Disadvantages of debt consolidation loans

Pay more interest

Unfortunately, consolidated loans can promise lower monthly interest rates, but are likely to pay more debt throughout the repayment process.

Low interest rates can relieve the pressure immediately, but in the long run, more will be paid.

High cost

Debt consolidation companies usually charge high electricity bills and interest rates. Because of high interest rates, consumers have difficulty paying off their debts.

Interest rate may rise

If the interest rate of the consolidated loan suddenly rises, you will be unable to repay your monthly debt.

No reduction of liabilities

Debt consolidation loans cannot reduce your debt. Instead, it will turn your small debts into big ones, and you will pay them back for a long time. This is not a long-term solution to your financial problems.

In order to follow the path of financial freedom, we should not seek long-term solutions such as debt counseling, but should spend wisely to save for the future and emergencies.

4. I don’t know where to go from here

Please contact your experts to determine whether debt counseling is the best solution. A first step towards a debt free future. Don’t wait too late. Contact debt relief for help. We will guide you every step until you are completely free of debt.