There is no doubt that debt consolidation can help you both in the short- and the long-term. When you have a number of debt streams, all of which need to be paid separately every month, you may find that your disposable income stretches a little less than it did the month before.
Consolidation loans can help with this giving you access to more income, reduces expenses and a single interest rate that makes the entire amount to be paid much less.
Many debt consolidation companies recommend finding a debt consolidation loan that works for you. This is so you can focus on the things that really matter, such as your family, your career and yourself.
Why choose debt consolidation loans South Africa?
If you have decided to apply for a debt consolidation loan, you are already on your way to greater financial freedom.
One of the benefits of choosing debt consolidation loans is that you pay a lower monthly amount than you would if you were paying for a few streams of debt. For example, if you were paying off two credit cards and a store card, your monthly installment for each could be R300. In total, this means a monthly payment of R900. With a debt consolidation option, you would be paying one amount of R750, for instance, since the singular interest rate would be favourable for you, rather than for the lenders. Debt consolidators in South Africa use this principle to help their clients become more financially free.
Debts consolidation and the interest rate
Interest rates on a number of debts really add up. When you’re paying for the interest rate of a credit card to one bank, another credit card to a different bank and store card to a retailer, you’re paying three interest rates.
A debt consolidation option means that you club all of those debts together and you only pay one interest rate to one lender. This means that lower interest rates too, especially since loans in this regard are usually long-term, whereas credit cards and store cards are considered short-term.
Long term debt consolidation loans have the added benefit of dealing with just one service provider. Communicating with just one company, rather than multiple representatives of multiple companies means you benefit in terms of reducing your stress too.
When you use personal loans as a form of consolidation, you can also shop around for better rates and for larger lending amounts.
If you need a little more cash than your total loan amount to use for an emergency, for home renovations or even to pay for a family ceremony, these types of loans allow you to do it without having to worry about the money you spend.
You will still be paying the agreed upon monthly rate, and this will be your only commitment. When you want a solution to your debt that is smarter, better and just makes more financial sense, why not give debt consolidation a try. This will free up your cash while reducing your stress in the long-term.