South African consumers are swimming in
a sea of debt. Currently consumer credit
to households is estimated at R760bn
with 14 million active credit consumers
and 50 million open accounts. The
average % of debt to income is 73%.
There are 80,000 judgments for debt per
month.
Making the minimum payment on all your
credit cards, mortgage and personal
loans will not cut it. The compounding
of interest (interest on interest) is
working against you and some day, you
will find yourself in a big financial
hole if you do not do something about
it.
Therefore consumers are turning to debt
consolidation loans, attracted by the
benefits and advantages these loans have
to offer. Lets discuss some of the
possible advantages of debt
consolidation.
Single Payment
Most consumers prefers to make a single
payment instead of having to make
payments to several creditors. This way,
you can do away with the damaging
effects of dealing with unmanageable
debts. A debt consolidation loan will
help you bring your entire debts under
one umbrella. Keeping track of your
money will not be difficult.
Interest Rate Reduction
A major benefit of debt consolidation
loans are due to the fact that the
interest rates are half to one-third the
interest charged for revolving credit
card accounts. Debt consolidation loans
are secured loans - meaning your home is
used as collateral while borrowing
money. This reduction in interest rate
turns out to be a blessing for
consumers.
Monthly Admin Fees Savings
By consolidating your debt, you are not
only saving on the overall interest
rate, but you are also saving on all
your monthly charges for all your
separate accounts. This can be
substantial if you take into account all
the monthly administration charges for
your bond, overdraft, loan, car
repayments etc.
Low Monthly Payments
You eliminate all your high interest
debt when you consolidate your debt. You
will now be making a low monthly payment
on your debt consolidation loan and this
is the only loan you need to worry about and
pay off.
However, before jumping into debt
consolidation loans, you should do some
calculations first on the interest you
are paying on your current credit card
and personal loan accounts and then
check how much you will be saving by
getting a debt consolidation loan. Next
you should plan to use these savings
(interest) to pay off your debt
consolidation loan as soon as possible,
to maximize savings.
Tax Free Investment
The best investment you can make is to
repay high interest debt. The return on
this investment will be in excess of 20%
on credit card debt, for example, and
that return is tax free. Fund managers
who have achieved the same rate of
return for their clients the past year
are very few and far between.
.
To apply for a debt consolidation
loan you will have to fill out a short
application form. You will then receive
a FREE quote from well established,
nationally recognized lenders. You do
not need to decide now whether the debt
consolidation loan is for you.
Just apply and compare the repayments to
your current situation. There is no
obligation on your part. If you decide
that it is not for you, you simply do
not have to accept the offer. You have
nothing to lose and everything to gain.
20 Second Application
