How Does Debt Consolidation Work in South Africa?
What is debt consolidation?
Debt consolidation is the act of taking out a new loan to pay off other liabilities and consumer debts.
How does debt consolidation work in South Africa?
Debt consolidation works by consolidating many debt obligations into a new loan with favourable terms, such as a lower interest rate structure. Suppose your application for a debt consolidation loan is approved due to meeting specific risk requirements. In that case, your credit provider, such as a bank, will pay off your outstanding loans and combine them into a larger loan. This simplifies repayment while also saving you money on administrative fees.
Do you have to qualify for debt consolidation?
You must meet the lender’s minimum requirement to qualify for a debt consolidation loan.
Who qualifies for debt consolidation in South Africa?
Applicants must be 18 years and older to qualify. Applicants must also be permanently employed and have a monthly salary of at least R3000. The applicant’s credit score must be between 600 and 700.
How long does it take to get a consolidation loan approved?
The entire process usually takes between four and six weeks from the date your application is received.
How much debt do you need for debt consolidation?
No minimum amount of debt is required to consolidate because lenders have no such criteria. Your loan payments, however, should not surpass 50% of your monthly gross income.
How can I get a debt consolidation loan?
1. Check your credit score and reports.
2. Determine your loan amount.
3. Research different lenders.
4. Apply for debt consolidation loan.
5. Receive funds.
