Helpful advantages to debt consolidation

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Compare the advantages of consolidating debt

Debt consolidation is a great option through many banks and debt solution companies where you can take out an affordable loan to pay off all of your current unsecured outstanding debts.

These debts can include but are not limited to store cards, credit cards, personal loans, short-term loans, and more up to the value of R300,000. With all your debts cleared off, you can then, instead of paying multiple debts, only repay one monthly payment.

This will make your journey towards financial freedom a lot easier as it is enabling you to combine all your high-interest debts into a low-cost loan that you can easily manage.

With this loan, you will be able to save money on interest as your once-a-month repayment will be less than you are currently paying across all of your monthly credit repayments to the companies that you are in debt with.

Isn’t Debt consolidation just a debt review program?

They are indeed not the same. A loan that is simply used to combine your debts will not require a court order as debt review does and it will allow you the breathing space you deserve while improving your credit score.

This is because you will pay your current debt with the means of one consolidated payment at the end of the month over a longer period instead of making multiple, individual payments at the end of the month.

Besides, you will need to have a good enough credit score to receive a loan that will pay off your outstanding debt, you cannot have a good credit score if you are under debt review.

Benefits to getting a debt consolidation loan

This option to pay your debt by consolidating all your credit into one comes with many advantages that will benefit you in the short term and the long term. It is a great way of bettering your financial situation. Below, you will find these top 5 benefits, explained to help you.

  • All your current credit loans are essentially consolidated into one efficient loan.

This is beneficial because it allows you peace of mind knowing that you will only need to make one monthly credit repayment without stressing about multiple creditors.

Conveniently having all your debts cleared off is a great benefit because you no longer need to wait for all your monthly credit repayments to go off from your account before you can start living. The great part is that it will be a much lower amount that will only go off once giving you the ability to budget and spend your money freely.

  • As a result of consolidating your loans, your monthly repayment is suited to your needs and lifestyle.

This means that the monthly repayment amount will be tailored to you and your personal financial needs, which means that it will be far more affordable for you come month-end.

  • Debt consolidation allows you to sleep better at night.

This is possible because when you get a loan to consolidate your debts, your repayment will be less than what you are currently paying for your monthly credit repayments.

This will definitely free up cash for your other monthly needs and reduce your financial burden. Therefore, your risk for stress, depression, and anxiety will be removed completely as you will enjoy instant relief with this kind of loan.

  • Your loan will be implemented quickly and easily.

When you get a debt consolidation loan, the amount of time between getting approved and receiving the loan is very quick and efficient. You won’t need to continue feeling the crunch of financial strain while waiting for relief.

It will take effect immediately and your monthly credit repayments will be reduced as soon as the following month. You will not need to wait another month and have to feel the unrelenting pressure once you have received approval.

  • It can improve your credit score.

Your credit score receives a nice little boost as a result of reducing your credit utilisation rate or credit utilisation ratio because all your credit is consolidated into one manageable loan. Your debt should be all in one basket instead of being across many different lenders and institutions.

Debt companies see that your credit utilisation is no longer all over the place, but rather structured and controlled, this also makes it easier to track your repayment rates and allows you to grow your score.

This is great because once your loan has been paid off, you won’t need to try and rebuild your credit score but rather, it will be stronger than it was before and allow you to gain access to new credit.

Helpful tips

Before taking out a debt consolidation plan and enjoying all the relieving benefits thereof, make sure to check out all the different consolidation options from different banks or institutions. Make sure you get the best possible interest rate on your plan over the period that works best for you.

This is better than just taking the first one you find because it might not be the best one for your personal needs and you could get an improved interest rate elsewhere, from a different debt solutions company or bank.

Summary of Consolidating loan benefits

Besides feeling financial relief, you will enjoy many other benefits as discussed above that will take effect on a short and long-term basis. This makes debt consolidation a great option for many who are currently feeling financial strain as a result of their monthly credit loan repayments.

Many different banks offer great deals on their loans and plans for debt and so it will be beneficial to shop around to find the most competitive one. Just remember that you should not feel worried about getting yourself into this kind of loan as it will help you and your credit score in the future.

Are there only 5 benefits?

Other benefits could, after all, relate to you and your finances. The above are only the top 5 benefits when you take out a loan to clear off your debt, but there are certainly many more benefits for you and your family to gain from.

Being able to live a better quality of life and providing a higher standard of living to yourself and your dependents is a big deal amongst various other benefits.

Popular & reliable direct lenders offering

  1. Capitec Consolidation loan

    Capitec

    • Get rid of debt
    • Lower rates
    • Affordable repayments
  2. Nedbank Consolidation loan

    Nedbank

    • Loans up to R300,000
    • Term up to 72 months
    • Interest from 10.25%
  3. African Bank Consolidation loan

    African Bank

    • Loans up to R250,000
    • Term up to 72 months
    • Interest from 15%
  4. Debt Busters Consolidation loan

    Debt Busters

    • Asset protection
    • Lower fees
    • Affordable repayment