It is possible to turn all your debts into just one and greatly reduce your interest rate! This is not magic. This is a debt settlement strategy called a debt consolidation loan.

So if you’re interested in getting rid of your debts, read on! Learn about this service below!

A debt consolidation loan is a type of loan that allows you to combine multiple debts into a single loan. Thus, you can turn all your bills into a single debt to be paid monthly.

Therefore, this can help simplify your finances and even reduce the rates of your debts. You’ll be able to make low monthly payments and save money in the long run.

In South Africa, debt consolidation loans are offered by banks, credit unions, and other financial institutions offer debt consolidation loans.

Before offering this credit, creditors may request information about your existing debts. You must also inform interest rates and payment conditions.

The lender will pay off your debt if approved for a debt consolidation loan. In the coming months, you must repay it generally by paying lower interest.

In fact, a debt consolidation loan can have several benefits. Below, learn about the main advantages of relying on this strategy:

Debt consolidation loan services are available from major banks and lenders in South Africa.

Being over 18 and a South African citizen/permanent resident are basic prerequisites for getting any loan.

However, the eligibility criteria may differ slightly according to the bank/lender offering this service.

However, below, you can find out about the main criteria for using this strategy:

Getting a debt consolidation loan in South Africa might be easier! Below, learn how to apply for this credit service today.

Before looking for a loan, you should know the size of the debt you want to consolidate.

To do this, write down your debts and the interest rate on each debt on a piece of paper or a spreadsheet.

After such a calculation, you can even conclude that you can pay off your debts without a loan by reducing expenses.

However, if the volume of your bills can compromise your monthly budget, it is better to consider consolidation.

Search the internet or go to bank branches in person to learn more about consolidation loan terms.

Also, always check the creditor’s reputation with customers who have already hired this service.

You can visit the review or opinion site. Indeed, this care can reduce the chances of having unpleasant surprises. Finally, the lowest rate is not always the best deal.

Ask about initiation fees, service maintenance fees, and everything in between.

After finding the best proposal, it’s time to close the deal. At this stage, you will need to gather identification documents. Also, gather up-to-date proof of income and housing.

This paperwork includes a list with information on all your debts and official documents for them.

After choosing a lender and gathering your financial documents, you can apply for the loan. The lender will review your application and credit score.

This query may lower your credit score temporarily. But your score will increase again if you make your loan payments on time.

Review the loan terms and interest rate carefully if approved for the loan. Ensure you understand the repayment terms, monthly payments, and fees.

After signing the contract, the loan money will be deposited into your account or hand-delivered.

So, you must use it to pay off all your debts. From now on, you won’t have to worry about small debts. In fact, pay the installment of your loan.

In fact, many banks offer the option of automatic payment of loan installments.

This is a way to guarantee that you will not forget or delay an installment. If your lender offers this feature, don’t hesitate to use it.

Finally, remember that getting a debt consolidation loan is not a magic bullet. To no longer rely on this service, you must learn to manage your finances.

In fact, there are a plethora of books and courses that can help you with this. One of the main ways to get out of the “rat race” is to learn how to invest.

You can start doing it today. Just know the best investment opportunities available in South Africa. To know them, see the following post!