What Is A Consolidation Loan?
Consumers that are over-indebted have a few options available to them. One option is the Debt Consolidation Loan. A consolidation loan is taken out to settle all other debts that you may have.
The problem with these loans are that they come with high interest rates. By the time a person needs a consolidation loan, his credit score might already be negatively impacted. This will mean that the interest rate will be high.
Many of our existing clients had consolidation loans before they applied for Debt Review. The main problem is that the client usually takes out the loan, settles the accounts, but then start using them again. This obviously puts the consumer in a far worse financial situation than before.
One other problem is, as mentioned, the high rate of interest. In most cases it just does not make sense to pay more on interest than you did before, just to save a couple of Rands. A loan will in most cases cost you more over a long period than Debt Counselling would.
With our debt relief programs, we could lower your interest to 0%, depending on your situation. So give us a call first before applying for that consolidation loan.
Can You Apply for Debt Review if You’ve Immigrated? Sandton Debt Counselling can assist with debt review for those who have immigrated to South Africa.
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