What does Debt Consolidation Cost?
So we know that you can save money on admin fees and bank debit order fees by consolidating your debt into one loan. If you have multiple loans with different interest rates, calculate the average interest you are paying and aim to find a consolidation loan with a better interest rate than that average. We will assist you with this.
Cost of Debt Consolidation varies depending on the product you choose
There are no out of pocket costs involved with Debt Consolidation. Costs are based on the product you choose, loan amount, term requested and interest rate offered.
FACTORS AFFECTING COST:
1. The amount of debt you need to consolidate.
2. The Loan you are applying for.
3. The term requested
4. Interest rate.
We don’t use a ‘computer-says-no’ algorithm. We get to know each and every consumer and their specific needs. So if your financial criteria doesn’t fit the strict criteria of many other institutions, you could have more success here. After all, we want to say ‘yes’ to helping you get out of debt and prosper.
Once the assessment is complete and pre-approval granted for Debt Consolidation, we will make an appointment with you to discuss all the costs involved. The application will only proceed once you understand the costs and we have also covered all questions in a satisfactory manner.
Debt Consolidation - All Your Debt in One Payment
Debt Consolidation means taking out one new loan, large enough to settle all other existing loans and credit facilities.
In effect, multiple loans and credit facilities are settled by the larger loan, leaving only one loan to manage each month. Therefore a consumer is not getting rid of debt but merely combining multiple debt into one affordable loan over a longer term.
Debt becomes more manageable and stress levels are reduced.
The opportunity also arises in which the consumer can request early settlement discounts for the existing debt, thus further reducing the cost of debt in the form of interest charges.
How Does Debt Consolidation Work?
One loan is used to settle multiple credit facilities. This in turn improves cash flow and makes it easier to manage debt your debt repayment. Your monthly installment will be reduced and you will benefit from a lower interest rate. Each Credit Provider also applies its own monthly charge or annual card fee and so having only one loan with one company will also minimise these additional costs.
More Money, Less Stress with Debt Consolidation
If your application for a debt consolidation loan is approved, your credit provider will pay off your outstanding loans with the new larger consolidation loan.
This makes repayment easier while also saving you money on admin fees. Admin fees are charged by each credit provider on each loan. The more loans you have the higher the admin fees will be that you pay each month. You will also save on Credit Life Insurance as you will only be insuring one loan.
A Debt Consolidation loan usually has a loan term longer than those of your original credit agreements. This lowers your monthly installments which will increase you monthly income. By extending the term, the interest payable over the term will be more. You should consider trying to pay off your consolidation loan sooner than the term offered. Use annual bonus or additional income to achieve this.
Also remember that when your outstanding debt has been settled, store and credit cards remain open. If you have not been particularly good at managing these accounts in the past, we suggest that you close these accounts to prevent the temptation of accessing them again.
If you are disciplined with spending then leaving these facilities open will improve your credit score.
Benefits of Debt Consolidation?
One benefit of debt consolidation is the monthly cash savings it provides in the form of reduced admin charges and bank costs. The other comes from consolidating debt into a lower interest loan, which minimises the overall interest charged over the term of the loan.
One Easy Repayment with Debt Consolidation
The first obvious benefit to debt consolidation is that it reduces your multiple debt repayments into one. This helps you in two ways. It simplifies repayments, and it makes it easier to budget, since you know exactly how much will be debited from your account every month.
HERE ARE THE OTHERS:
You do not have to be Credit Worthy to qualify.
Any negative listings on the Credit Report are removed.
The Credit bureaus will show that each account has been settled or paid up.
Debt is reduced through lower interest rates and longer terms. .
Combine several credit facilities into one easily managed payment.
anaging one loan repayment instead of several loan repayments each month reduces stress levels.
Qualifying Criteria Debt Consolidation?
As with any regular unsecured loan, you must first meet certain qualifying criteria. Affordability ratios as well as Income to Debt Ratios are calculated to determine this. These requirements are in place to ensure that you can afford to repay the debt consolidation.
Important factors when applying for Debt Consolidation
While anyone can apply for Debt Consolidation even if they are not creditworthy, have adverse notices on their credit reports or are currently under Debt Review, there are still other important factors to consider before applying.
Permanently employed for at least 3 Months.
Affordability. There must be enough available income after living expenses to service the new monthly installment.
Total living expenses should not exceed Income.
You must have a valid South African bank account into which your salary is paid each month. Statements will be requested.