If you have come to the realisation, like so many other South Africans, that it is time to start reducing your debt, instead of developing a bad case of ‘swiper’s wrist’, then you might have considered the option of debt consolidation.
Debt consolidation can be beneficial in that, if you are struggling to keep track of all your accounts, loans and various credit providers, it allows you to merge all of your debts into one, so that you only have to make one monthly payment to be distributed accordingly. It can also be a way of helping you to meet your monthly payments, as debt consolidation often comes with reduced rates.
How it works with some financial institutions is that you provide them with a list of all your outstanding debts and then, if you qualify for a debt consolidation loan, you will be credited with the total amount you need in order to settle all your debts with your various credit providers. In this way, you will end up only owing this amount to the financial institution who consolidated your debt, which means you will also be paying a much lower interest rate – instead of paying off many accounts with high interest rates.
Other financial institutions require that you provide them with a settlement letter from your current credit providers. Thereafter, should you qualify, they will settle all your debts for you. In this way, you won’t be faced with the temptation of using the debt consolidation loan for other things, which would cause you to sink even deeper in debt.
Should you opt for debt consolidation, you will probably save on interest and other costs, as a single payment to one financial institution is likely to be more cost-effective than paying off a number of institutions, with a scary array of different administration fees and bank charges, which tend to be particularly high these days.
Furthermore, you won’t have to deal with your credit providers, should you choose the debt consolidation option at National Debt Advisors, as your debt counsellor will deal with all of your credit providers on your behalf. Furthermore, NDA offers you a consolidation solution that will allow you to only make one payment towards your debts each month, yet doesn’t require you to take out a loan, if you are concerned about creating more debt for yourself.
