Debt consolidation loans a viable financial solution designed to simplify multiple debt repayments and, under some circumstances, save the debtor money. The process essentially involves taking out a single, new loan, at the lowest possible interest, to pay off multiple smaller debts.
Those who do not fully understand the intricacies of the system often state that taking out another loan to pay off previous loans doesn’t make sense – but it certainly can. If you have multiple creditors harassing you by phone (this process can be extremely unpleasant) and you want the calls to end, then a Debt consolidation loans is the fastest solution. And, if it’s planned out very carefully, it can also be the most cost effective option.
It’s common practice in South Africa for creditors to sell your debt to other companies, and this is typically where payment notifications turn into harassment. Although it’s illegal, some of these debt collection companies will add nonsensical bills to your owed total – charging you every time that they have to make a call, whether they reach you or not.
If you feel like you’ve lost control, that these collection people are mishandling your account and costing you more money, a Debt consolidation loans is one option.
Personal Loans:
The interest rate you’ll get on this type of loan really depends on your credit score but most banks will offer this option if asked about debt consolidation loans for non-homeowners. Due to the National Credit Regulator cracking down on reckless loaning by banks, most will not even list consolidation as a service or product on offer. With proper planning and expert advice, the personal loan is a good way to proceed with a debt displacement strategy.
Secured loan:
This can be an excellent way to get low interest loans for bad credit. You’re essentially securing the loan by attaching an asset to it, greatly reducing the risk to the lender thereby reducing your interest rate. You can attach big ticket items such as your house or car, but be certain that you’d be able to pay that loan back or those assets can be repossessed.
