As we head into the new year we choose to leave certain things behind. Debt cannot be left in 2018 unfortunately and follows us into the new year. After a busy festive season, many South African consumers will find themselves in a tough financial position. Consumers look for debt consolidation to simplify their accounts. With pay day more than three weeks away, many consumers will simply not make it.
2018 was a difficult year for South African consumers. High levels of unemployment, low consumer confidence and increasing prices were some of the troubles thrown our way. It’s not all doom and gloom, however. Those with lots of debt have got a few helpful options to assist them out of their debt traps in 2019.
What Is Debt Consolidation?
Consolidation means to combine a number of separate things into one. Debt consolidation is done in a number of different ways:
- Debt Consolidation Loan
A debt consolidation loan is a large personal loan that is used to settle all smaller debts. Although this may seem like the ultimate debt solution for those with lots of debt, it is often quite difficult to qualify for this type of loan. Consumers need to have high credit scores as well as a clean credit report.
Missed payments and arrears could disqualify you form being granted a consolidation loan. Consumers need to have a high affordability. Credit providers are unlikely to grant a loan to a consumer that cannot afford it.
- Debt Counselling
The other form of debt consolidation is a process known as debt counselling. Debt counselling is offered by debt counsellors who assess to see if consumers are over-indebted. The process is governed by the National Credit Regulator (NCR) and is part of the National Credit Act.
The debt counsellor formally negotiates with credit providers to reduce monthly debt repayments and interest rates. They create a new payment plan for the client and provide them with legal protection against creditors. If you are in arrears on your accounts or have a low credit score, you can still apply for debt counselling.
Vantage Debt Management offers free financial assessments for consumers with debt. Vantage is registered with the NCR and uses all the recommended process and systems available to provide the best service possible.