Debt Consolidation Loans South Africa
July 24, 2014
Understanding how a debt consolidation loan South Africa affects your credit scores is important if you are planning to take out a personal loan.
Accessing a debt consolidation loan can be a big help when you need to pay for the things you can’t afford right now. When applying for a loan, you may be thinking about paying your bills, consolidating all of your debt streams and the single interest rate that will make it all easier for you. One more consideration to add to your list is your credit score. This can be affected by entering a debt consolidation agreement, but not necessarily a debt consolidation loan.
What the best debt consolidation loan companies will tell you
Most companies that offer consolidation loans South Africa will tell you that it is the debt review process that could adversely affect your credit score.
A debt consolidation loan, on the other hand, could actually improve your credit scores in the long-term. Because a debt consolidation loan allows you to consolidate your debt, that is, mainstream it, you pay only one amount per month instead of many, and one interest rate. This frees up cash that you may need to spend on other things. Or you may want to save for a rainy day,
Debt consolidation loans South Africa also improve your credit score because you will, in theory, use it to pay for the debts you had, which makes you a good borrower. When you apply for a debt consolidation loan or any other type of loan in the future then, you will be considered a low credit risk by companies that offer debt consolidation loans South Africa.
The truth about credit scores and debt consolidation loans South Africa
There are many companies that offer you a debt consolidation n personal loan with great advice too. You’ll probably notice that if you bring up the question of loans and how these affect your credit score, most providers will gladly explain how they can boost your credit profile. An example of this is the person who has a store card, a credit card and a personal loan. When this person applies for a debt consolidation loan, they undertake to pay off the three debt streams they already have, as listed above. Long term debt consolidation loans South Africa in this regard gives them the power to pay back what they owe, and they only have to pay back one monthly amount. This personal loan to consolidate debt has just one interest rate and that means that they are paying back less in the long term than they would have paid with three debt streams.
Debt consolidation loans South Africa
When you need to boost your credit score, personal loans can be given of a high value to cover the total amount of all your debt. The amount being borrowed then is equal to the sum of the three loans. But because debt consolidation loans South Africa carries one interest rate, the total payment at the end of the term is lower. This process is quite simple to understand and in your unique case, you’ll find that you have more freedom financially than ever before.
Next step: Complete and submit the form on this page to apply for a quick loan
All info was correct at time of publishing