This is a process that combines all your monthly debt repayments into one payment. The main aim is to reduce the installments to provide financial relief to the consumer. Debt consolidation itself is not a specific product, but a term used to represent all processes that aim to achieve this goal.

In South Africa, there are two types of debt consolidation: Debt counselling/review and a consolidation loan. Each of these solutions has unique qualifying criteria and benefits. Vantage specializes in helping consumers determine which option would work best.

Debt counselling was created to get over-indebted consumers out of debt. An NCR registered debt counsellor will assess your entire financial situation and work out if they can assist you with a new, affordable repayment plan. They will then formally negotiate with all your credit providers to reduce monthly installments and interest rates.

A consent order is granted to formalise the new repayment plan. Payments are made through an NCR registered payment distribution agency that distributes the funds to each credit provider monthly. Once all the debt has been paid you will be issued a clearance certificate. Your credit record will be restored, and adverse information will be cleared.

When you don’t pay or short pay your debt, your accounts go into arrears and this is reflected on your credit report. You will be contacted by your creditors with calls, SMSs and emails. If you are not able to make up for the missed payment(s), your account balances increase due to interest & fees and your credit score will decrease. Next, your credit providers will start to handover your account(s) to debt collectors and lawyers. Your ability to access further credit will reduce rapidly.

Eventually your credit providers can take legal action against you in the form of a garnishee order on your payslip or obtaining a judgement. Judgements can reflect on your credit report for 5 years or more. Legal action can eliminate your chances of getting further debt from any credit providers. This is often what is referred to informally as being “Blacklisted”. If you are struggling to keep up to date with all your debt repayments, complete our call back form.

A consolidation loan is essentially a large personal loan used to pay off smaller loans. This loan is typically given at a high interest rate which often makes it an expensive option to take. Credit providers will generally check to see if you have the following: High credit score, no arrears on your accounts and sufficient debt affordability*.

*Affordability is how much money you have left after paying for all household expenses & debts.
Consolidation loans can help you to reduce monthly debt repayments if you have short-term debt with high interest rates. If you have a home loan, vehicle finance or long-term debt, this solution may not be the best for you. If you are over-indebted, you are unlikely to qualify for a consolidation loan.