January is the month that many South Africans suffer the most. The bulk of income has been spent over the festive season, and with the holidays behind us, parents are scraping their last monies together to go stationery shopping for the kids and the rest of us are preparing to go back to work. This means calculating what it’s going to cost to get from home to work and back for the rest of the month, and that’s only one of the expenses that you might be responsible for.
For this very reason, many people turn to debt consolidation loans to help ease the weight of their debts over this time.
But what is a debt consolidation loan?
Debt consolidation is a loan for the sum of all of your unsecured loans, like personal loans, from various credit providers. If you consolidate your debt, you are able to settle all your high-interest debts and close these accounts, leaving you with only one debt repayment per month to the credit provider who granted you the consolidation loan.
But before you rush into getting a consolidation loan for bad credit, first weigh up the advantages and disadvantages of debt consolidation.
The Pros And Cons Of Debt Consolidation
One of the major problems with debt consolidation is that there are lots of illegitimate, fraudulent debt consolidation companies out there. These companies usually charge thousands of rands in fees, offering penalties, an injured credit rating, resulting in untrustworthy South African consumers.
If you have a bad credit record and can’t afford to make regular payments, debt consolidation is probably not the best idea for you. You see, it was designed for individuals who pretty much have a handle on their debts, but who would benefit from a clean, simplified repayment process, for the purpose of making their lives easier.
Alternative Debt Solutions
If you have a poor credit score and a company is offering you debt consolidation advice, this is when you should start to become suspicious. The interest rates on these loans will be high and the terms, mostly unfavourable. Many people agree to terms that they don’t understand out of desperation, telling themselves that they had no other choice.
Well, we want you to know that you have another option. Debt counselling does all the things that debt consolidation help can’t do for you. Debt review protects you, your credit profile, and your assets and also prevents credit providers from taking legal action against you. Debt rescue helps you become debt free, without any risk! Contact National Debt Advisors (NDA) today to find out if you qualify or get debt review advice right here.