Everyone knows that at the moment finances are tight in the majority of homes. People have turned to taking out loans in order to survive. Then they have had to take out loans in order to pay off the loans that they took out in order to get through the month. This turns into a never ending cycle of debt and it eventually leads to the person having a bad credit status leaving them with the inevitable blacklisted status. When a person is blacklisted the consequences are horrible and it can even lead to financial ruin.
The average household in South Africa is struggling to keep its head above the financial waters. Although taking out a loan is a tough choice to make and it is often the last resort, the reality is that these days you are likely to make debt somewhere along the way. When people end up making lots of small amounts of debt, they will usually find that they are paying back much more money than the original plan. Each small loan taken comes with interest and lots of small amounts of interest eventually becomes a nightmare. But before the waters swallow a person completely they have a great option to help ease the monetary woes: the consolidation loan.
Consolidation loans are considerably different from cash loans, personal loans and payday loans. The consolidation loan is not used to pay for something material or to get you through the month. Consolidation loans are designed to make having debt easier. When you end up with lots of small little loans that need to be paid back and you are running the risk of becoming a person with a bad credit history or even a blacklisted status, that consolidation loan is, to be cliché, a loan super hero.
The consolidation loan allows a person to pay off all of the small loans that they have accumulated and rather than paying off individual loans and individual amounts of interest each month, the person with the consolidation loan will instead pay off one loan amount. This helps to reduce the overall costs that are each month attributed to paying back small loans. The consolidation loan is usually used as one of the last resort measures.
The first steps to be taken towards getting a consolidation loan is to get settlement accounts from all of those loans that still have payments on them. A consolidation loan is then applied for and the amount of money to be loaned is obviously the same amount that is owed on all of the loans to be settled. If the consolidation loan is approved, then the loaned money must be used to pay off all of the small loans. There are no hidden costs and no hidden terms and conditions when taking out a consolidation loan. Those financial institutions that lend out consolidation loans, at the end of the day want to help you to get your financial wellbeing sorted out so that you can be debt free.
The consolidation loan can also be taken out by those who have a bad credit status due to having bad debt. Depending on their circumstances, those who have been blacklisted can also apply for a consolidation loan. This type of loan can improve the credit record and status of those who have been blacklisted. This is unlike qualifying for a personal loan, payday loan or cash loan which can depend mostly on your credit status.
What are the benefits of consolidating your debt?
Did you know that many people don’t know much about the consolidation loan so they stay away from it? It’s true. People are unaware of the immense benefits, such as saving up to 20% of your money each month, that consolidation loans can have and as a result they avoid researching the consolidation loan.
One of the biggest benefits that a person will get to have when they take out a consolidation loan is that they will not be paying duplications of payments, service fees and interest each month as they will only be paying back the money and associated fees of one loan. This means that a person can actually be saving their money each month instead of paying out enormous amounts that they cannot really afford. When you are struggling with finances saving any amount of money is a huge bonus as it is the first step towards turning your money troubles around.
It also makes sense to say here that the consolidation loan that you are looking at taking out should have an interest rate that is not only affordable but is less than the amount that you are paying on your collection of loans each month. You also do not want your loan payments to increase as there is no point in having to pay back more each month.
When you take out a consolidation loan you will make paying back your outstanding money easier than if you still had many small loan repayments to make each month. The repayment will also be completed quicker than if you are trying to pay back a number of different small loans.
Having a consolidation loan will require the person who has the loan to practice discipline and control when it comes to their finances as they will have to watch their spending in order to make sure that they do not make more debt. The point is to get out of owing debt, not to clear your debt just to end up making more debt.
At Find a Loan South Africa clients have a wide range of loan options available to them. The application is submitted to Find a Loan via the website and it is then sent to a number of money lending companies that have been screened and found to be suitable by Find a Loan. These lenders can then contact the person in need of a loan and the process will continue from there. Find a Loan can help you to find a personal loan, cash loan, payday loan or consolidation loan.