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 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.
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.
Finding a loan while you have been listed on creditors bureau’s bad books can be difficult. A person who has a bad credit record will find it difficult to find a loan for the most important things like a car loan and home loan. We will discuss what options people have in getting loans from registered credit providers.
The National Credit Regulator (NCR) was formed to fulfill the requirements of the National Credit Act 34 of 2005. The act aims to:
provide for the general regulation of consumer credit and improved standards of consumer information
prohibit certain unfair credit and credit-marketing practices
promote responsible credit granting and use and for that purpose to prohibit reckless credit granting
provide for debt re-organisation in cases of over-indebtedness
regulate credit information, among other details which you can read here
Although you may be blacklisted the act helps credit providers from putting people into even more debt without exercising the debt they are currently servicing. Be that as it may, you may still go and seek a loan from registered credit providers who will need to also work carefully not to put you in even more debt, or debt that you can’t service.
So, what ways can you get a loan even though you are blacklisted?
You may look for credit providers who will review your credit score and establish if even though you have a bad credit record they may be able to lend you money. Be careful that they are registered by searching for them on NCR database. Being a blacklisted individual may also attract a higher interest rate as you are still a risk.
You may apply to consolidate three or four major debts and reduce these by hundred or thousands or Rands a month. This is because a debt consolidation loan takes one major loan for all your major debts such as personal loan and credit card loans. You now will have only one loan with a stable interest rate. You may be asked for collateral such as your home, but this will depend on your debt and credit provider.