Things to remember when apply for Debt Consolidation Loan Online
- Your consolidation loan may have a longer term. That means you could end up paying more interest in the long run
- If you consolidate short-term debt such as clothing accounts, it could take longer to pay off
- Consolidation makes more money available. Avoid using this extra money as an excuse to take more credit, placing you in the same situation as before
Tip: Before you consolidate your debt, don’t just think about how much and for how long you’ll be paying. Look at all the costs involved when you take credit.
How it works
Suppose that you have 3 different store cards, and you’re paying off a car. Your minimum monthly payments leave you with almost no cash left to actually live.
One way to solve this problem would be to consolidate your debt. You take out one single loan, and use it to pay off all of your other loans, leaving you with one loan amount and payment every month
Some Requirements for applying for an unsecured personal loan:
- 3 months non internet stamped bank statements
- 3 months pay slips (Please indicate a contact and number for your HR division.)
- Copy of green bar-coded Identity book
- Proof of residency
- Details of your next of kin (Name, address, contact no.)
- Settlement letter of your latest existing loan accounts to be settled. (Maximum 5 accounts to be settled)
What exactly will happen when you apply?
- A consultant will check documentation for accuracy
- A credit check will be done
- Your repayments to monthly income will be calculated
- A valuation of your property will be done
- The application will be forwarded to the banks for approval
What will happen if your application is successful?
- Your consultant will let you know
- An acceptance letter will be forwarded to you
- Attorneys will contact you to sign the registration letters
- All fees will be deducted from the total granted amount
What will happen if your application is unsuccessful?
- We will advise you the reasons why the application was unsuccessful
- We will review your circumstances and give tips
- We will make recommendations as to a solution that will work for you and why
10 Things to Know about Debt Consolidation in South Africa
- Creates temptation to spend the loan, so you could end up doubling your debts.
- You have to meet certain credit criteria to qualify.
- The poorer your credit score, the higher the interest rate you’ll be charged.
- You’ll only be offered a low interest rate, if you have a good credit score.
- You’ll have to pay off your debt over a longer period of time – more expensive overall.
- Can’t consolidate accounts that are in 2 months’ arrears or more.
- The loan amount you will be offered will depend on your income, expenses and risk profile.
- It’s not a ‘get-out-of-jail-free’ card or extra spending money.
- It won’t help you curb your over-spending and bad credit behaviour.
- It does not reduce your expenses – you have to foster better habits.