Debt consolidation loans and how they can help

There are a number of ways debt consolidation loans have helped people and it is by helping people not to default on the debt payments of get a bad credit record. A debt consolidation loan puts together all your debts so that you can pay off your debts and breathe a little easier the next few months.
A debt consolidation loan differs from a personal loan in that this can be large amounts of cash at your disposal. The interest rate is often lower and is payable over a longer period of time than a personal loan.
How else can they help individuals?
–    By putting your debt in one manageable loan.
–    By reducing the risk of defaulting on your high interest rate loans
–    By having one major loan to service you are less likely to be seen as a high risk by credit providers
–    By reducing the amount payable each month, you can breathe easier because you have a set budget that services the loan
You will have to consider a few things before rushing out to find yourself a consolidation loan, and this includes what the loan is for and how much you need in order to cover your existing loans.

Debt Consolidation Loans available in South Africa

There are a lot of debt consolidation loans for South African citizens, the trick is getting an affordable consolidation loan that suits you as an individual. A warning that is always given to people who would like to consolidate their debt is that they should realize that they are actually taking out another loan, which means their debt has not magically disappeared but rather that it is now a lot more manageable.

This is because consolidating a loan means you are taking a loan so as to pay off your existing loans that have a higher interest rate and you are putting your debt into one manageable loan that has a lower interest rate and, because it is mostly over a long period, a longer period to pay your debts off.

And which consolidation loans are available in South Africa?

They are the secured loans, where you have to have collateral like a house (and depending on who you talk to you can put in your pension, etc., and other sure finances as collateral). Credit providers who give these loans are mostly the big financial institutions like Absa, FNB and Standard Bank. To read more on how this is done follow this link.

The next is an unsecured loan, where you do not have collateral like your own home or secured finances. This, and you will find this out when you visit credit providers, is the most risky for lenders. Follow this link to find out more about it.

At the end of the day you do not need to despair about finding loans available to consolidate your debt tailored especially for you.

To apply please Click Here.

Unsecured debt consolidation loan for blacklisted people

debt consolidation loan

Apply for an unsecured debt consolidation loan and brace yourself for higher interest rates. What is the difference between this type and other loans used for debt consolidation? This is an unsecured loan, which means that you as the borrower would not place any collateral with the lender. Would you later to default with the lender they would claim from your claimed assets.

This sort of loan attracts higher interest rates because this is a greater risk for lenders. This is because an unsecured loan means you as a borrower are not fronting any collateral for the loan, which naturally makes you an even higher liability, and attracts an even higher interest loan than had you taken a secured loan.

Now, if you are blacklisted and don’t have collateral like a property, this might be the perfect loan for you to take up. Of course you will have to check the pros and cons of taking such a high interest loan over a long period to clear your debts. The higher the loan amount the longer you will have to pay the loan back.

You will need the usual documentation such as South African I.D., 3 months pay slip and bank statements.

To increase your chances, most credit providers are more likely to loan you if are not under debt review, earn a monthly or fortnight wage, not be a commission earner, have a bank account that your salary is deposited into, prove your money expenses so as to show affordability.

Unsecured debt consolidation loan for blacklisted people is a solution for most people, but not everyone.
To apply please go to our loan consolidation page.

Clear your debt with a Debt consolidation loan

debt consolidation loan

You can clear your debt and avoid being blacklisted by getting a debt consolidation loan from home loan providers. A debt consolidation loan is an extra loan that you take out on your home so as to pay off extra debt and avoid getting a bad credit record. This is possible because your home grows in value every year and by re-financing you are able to release some of that value and get a loan on it. You are now able to get that loan to pay off your other long term debts.

The loan that you get should be used for long term or high interest debt as this will better serve you in clearing debts and avoiding a bad credit record.

Debt Consolidation with SA Home Loans

SA Home Loans hopes you will do what they term “a switch” in order for you to have access to their debt consolidation loan. They have a rather solid track record as a lender home loan provider and claim over 100 000 clients. They give solid advice and ask their clients to consider how they will be spending the cash they get from doing a debt consolidation with SA Home Loans.

Contact SA Home Loans and ask for them to switch your home loan in order to get a home loan with them and get access to debt consolidation.

You can contact them 0860 2 4 6 8 10 and ask to switch your home loan to them. The interest rates will be discussed and calculated in their entirety so be sure to weigh their rates, it is worth it.

Switching is not as expensive as you might think and a competitive solution from SA Home Loans might save you from getting a bad credit record.

Debt consolidation using Standard Bank Further Advance (2nd bond)

If you have a home loan with Standard Bank you may take out what they term the Standard Bank Further Advance, which as they sort to explain as a  second bond. Just like other such loans you can use it to consolidate your debts.

Standard Bank Further Advance is a second bond that you register with Standard Bank and use to gain access to a money that you can use to pay off your debts, i.e. to consolidate your debts under one lower interest loan. Although it’s unlikely that Standard Bank will ask you what you will do with the money they might check that you will be using it wisely to avoid them getting into trouble with the NCR.

Some people confuse the Further Advance product with Re-Advance product. With Further Advance you can use the money for anything else you would like, but with the Re-Advance you use it to make alterations and improvements to your current property, but this will require that you give supporting documents like approved building plans and quotations. This is the only difference between these two products so make sure you choose the correct product so as to consolidate your debts with Standard Bank home loan.

If you would like to read more about how best to consolidate your debt please click here.

Consolidate your debt using your Absa Home Loan with Absa FurtherAdvance

Not many people can find this information as Absa does not directly or explicitly tell their customers that this is their Debt Consolidation plan/product. Yes, sure, you can use the money you get from this loan to pay off your other debts or make further purchases. If you would like to read up on what and how loan consolidation please read here.

Absa differs from other financial institutions and credit providers in that your home has to actually be worth the entire home loan including the extra loan amount you are requesting. For example, if you have an existing home loan with Absa and it’s worth R 300, 000 and are requesting R 100, 000 then your home will have to be evaluated at worth over R 400, 000. This is according to their conditions for taking out the Absa FurtherAdvance product.

But not to fret, you can actually use these funds as you see fit (which the NCR hopes is spent well).

Old Mutual Debt Consolidation Loan using My Money Plan

Old Mutual has a product which helps it’s clients to take out a Debt Consolidation Loan called My Money Plan. The My Money Plan financial product will help you reduce your debt by reducing charges and will also give you regular cash payouts.

The My Money Plan from Old Mutual consolidates your debt by combining it into one lower interest payment.

To qualify:

  • You must be older than 18 years of age
  • You need to be a resident of South Africa
  • You must have a valid South African ID document (Green, bar coded, 13 digit)
  • You must provide a current payslip no older than 1 month
  • You need to provide consecutive bank statements for the last 3 months
  • You need to have been employed for at least 12 months at your current job
  • Only individuals can apply for a consolidation loan

The interest rate applied  will be determined by your current credit score.

Contact Old Mutual and see if you qualify.

You can also visit our partners and fill in our application form to apply for a debt consolidation loan.

How to get a Debt Consolidation Loan

A few credit providers and financial institutions offer a debt consolidation loan. These are taken out by individuals who have incurred a individual debts, and a debt consolidation loan aims to help pay the debts off by paying only one major loan.

First let us explain what a debt consolidation loan is. You must remember that this is still a loan that you are taking out, but the advantage with it is that you take out a single loan in which you will now include all your high-interest loans such as credit card and personal loan and hire purchase debts.

Debt consolidation is mostly taken out by taking another home loan that will cover your existing debt. This leaves you with only servicing one loan with a possibility that the interest rate on this will be much lower. Credit providers will also be able to remove your blacklisting or judgement and clearing your credit record.

Another advantage is that if you are in danger of defaulting on your other payments, by taking out a debt consolidation loan you are able to immediately pay them off. To apply click here

You will have to realize that this will work for a few people and not everyone should take out such a loan. For instance if you will not be able to pay off this long term loan.

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