Here Are Some Simple Examples of What You Could Save With Loan Consolidation
Here Are Some Simple Examples of What You Could Save With Loan Consolidation. There are usually five steps involved in the loan consolidation process:
You complete an application form and provide the details of all your Credit Providers. Consultations are usually done telephonically and by e-mail, but can also be done in person.
Your loan consolidation company determines whether you are over-indebted, in other words, does your monthly expenses exceed your monthly income? You have to be over-indebted to qualify for Debt Review.
If you are over-indebted, all your Credit Providers and the credit bureau will be informed that you are under Debt Review. Your Credit Providers will also be requested to provide a Certificate of Balance (COB) in respect of your accounts.
You will immediately start to pay a single provisional reduced monthly instalment in respect of all your Credit Providers which will be affordable to you. During the first 60 working days, legal action may not be taken against you in respect of the debts that are under review.
After receiving all the COB’s, your loan consolidation company will restructure your payment plan and negotiate with your Credit Providers where necessary. After negotiations with your Credit Providers, your new restructured payment plan will be sent to all your Credit Providers and this payment plan will take effect.
Your restructured payment plan will reduce your monthly debt repayments to an affordable amount, leaving you with sufficient money for your living expenses.
Your loan consolidation company will instruct their specialist attorneys to apply at court in order to make your restructured payment plan a court order. You will not have to appear in court yourself, as your Debt Counsellor will be the applicant in the matter, unless the particular magistrate requires your presence.
The process will now be completed and you must ensure that your monthly payments are made timeously in order to prevent Credit Providers from taking action against you.