Should I Get A Debt Consolidation Loan?

So many people think that a debt consolidation loan is the perfect solution to their debt problems. But is it really? 

When struggling to keep up with monthly debt repayments, it might be easy to believe that a single loan could fix your current debt problems. 

A debt consolidation loan promises convenience – just one payment per month … but, and it is a very important BUT, what exactly are you actually signing up for with a debt consolidation loan? 

We urge you to please look at all the facts and the hidden costs of debt consolidation loans, as well as to seriously consider the safer alternative, debt review, BEFORE you apply for one of these loans.

What is a Debt Consolidation Loan? 

A debt consolidation loan is a new loan that a person takes out in order to settle all their other debts. Instead of making multiple payments to different creditors, with a debt consolidation loan, there is only one payment to the new lender (provider of the loan). 

This may reduce monthly instalments. However, please know that this reduction happens by extending the loan term, AND, by increasing the amount of interest needed to be paid over time. 

So while a debt consolidation loan may seem as immediate relief, it most likely will cost you a LOT more in the future. 

As the saying goes, appearances can be deceiving! 

Consolidation Loans: The HIDDEN Facts 

Unfortunately, so many of us fall for the promise of lower monthly payments, without realising what this will actually cost us. 

Here are some of the most common dangers and concerns to be aware of: 

• High Interest Rates:  Debt consolidation loans often come with interest rates substantially higher than your existing accounts, especially if your credit score is low. 

You’ll Pay More Overall! Why? Higher interest = higher cost over time, even if your monthly payment looks smaller.

• Good Credit Required: If you are already over-indebted, chances are that your credit score has dropped. Lenders will evaluate your credit history to determine your risk. A poor credit score may result in even higher interest rates, stricter terms, or, your application may even be rejected. 

• No legal protection: A debt consolidation loan is a new credit agreement that pays off existing debt, but this does not prevent creditors from taking legal action against you if you miss a payment. If you default on your debt consolidation loan payments, the lender can initiate legal action against you, such as obtaining a court judgment. 

Why is Debt Review the SAFER Choice? 

Debt Review is a regulated legal process specifically designed to help over-indebted South Africans. Debt Review is NOT a loan, it is a long term solution that will help you get out of your debt. Debt Review is based on what you can realistically afford while protecting your most important assets such as your home and vehicle. 

DID YOU KNOW?

• Debt review provides legal protection to stop all creditor harassment.
• Once placed under debt review, your home or vehicle will be safe from repossession.

Still unsure of which option to choose? 

When you are stressed about money, choosing between a debt consolidation loan and debt review might feel a bit overwhelming. You may be asking:

• Will I ever get out of my debt? 
• What if I choose the wrong option and make my situation worse? 
• Who can I really trust to help me? 

These are all valid questions. 

So many South Africans just like you, ask these same questions. Some try to manage their debt by taking out new loans, others fall deeper into financial hardship because the interest and fees just keep increasing. 

Let’s have a look at the REAL DIFFERENCE between Debt Review and a Debt Consolidation Loan:

At Debt Rescue, we have been helping over-indebted consumers since 2008. We offer a real debt relief solution that was implemented by the National Credit Act (NCA) in 2007. Our main focus is your long term recovery, not short term relief that comes at an extremely high price. 

Debt Rescue and Debt Review (Debt Counselling): 

• At Debt Rescue we conduct a free, no-obligation assessment of your finances.
• We consolidate all your debts into one affordable monthly repayment
• Our specialised consultants negotiate with your creditors for better and lower repayment terms. 
• We support you from your first initial assessment until you receive your clearance certificate. 

The Debt Rescue Difference:

• Our consultants are registered and compliant with the National Credit Regulator (NCR).
• We work with specialised attorneys to protect your rights.
• We understand that debt is not a sign of failure, it is a result of economic pressure.
• As a client, you are treated with respect and dignity, and always with complete confidentiality. 

Let us Help You Today!

Debt Rescue is here to help you out of your debt, without more loans, more fees and more stress.  When you choose debt review, you are choosing stability, legal protection, and a chance to rebuild your future, day by day. 

Contact us for a free, no obligation assessment.