Should I consider a consolidation loan?
If you're thinking about taking out a consolidation loan, it's safe to say that you know the anxiety associated with increasing debt. A consolidation loan gives you a way to simplify and pay off all your debt. Not only does it give you the opportunity to manage and settle all of your debt, but it can also represent the first step in your journey to financial freedom.
What is a consolidation loan?
A consolidation loan is a way of combining several existing debts into one easy-to-manage monthly repayment. The process can save you money, as you will now only have to contend with one monthly payment and one interest rate. Another benefit is the boost it gives your credit score as you successfully pay off your consolidation loan.
Will my application for a consolidation loan be approved?
The success of your application depends on a number of factors:
- A good credit record, which reflects a history of paying off your debts on time.
- Your ability to afford your consolidation loan repayments.
- Your existing debts, which should not exceed 50% of your income.
When should I consolidate my debts?
For many people, a consolidation loan is their lifeline. If your monthly income has become consumed by debt repayments, then a consolidation loan may be tempting. But, before you make a decision, remember that taking out a loan is supposed to make your life easier, not harder. Consider the terms and conditions of your loan repayment carefully before you commit.
A consolidation loan can help you get your focus back
If you can handle your budget with discipline, then taking out a consolidation loan will help you get back on track. At African Bank, you can consolidate up to five loans into a single consolidation loan of up to R250 000. The application process is simple and you can apply online.