Taken out one too many credit cards and store accounts, and now you can’t keep up with all the different repayments? Our Consolidation Loan helps simplify your debt into one consolidated loan. With our low interest rates and flexible repayment terms, it’s an easy choice to make. Simplify your life with an African Bank Consolidation Loan today – APPLY NOW
Why applying for a consolidation loan can benefit you?
You might ask, ‘are debt consolidation loans a good idea?’ Well, simply put, it depends on your situation. Keeping track of multiple debts can be confusing. A consolidation loan helps to simplify the repayment process by combining up to 5 loans into one consolidation loan of up to R250 000.
- Lower repayments
Paying interest on multiple debts adds up each month. Instead of paying interest on multiple accounts, you can rather pay a fixed interest on just one. Also, there’s less admin fees.
- Easier to manage
Having one fixed payment per month is a lot easier to manage than having multiple credit cards and store accounts. It is a predictable repayment schedule, where you know exactly how much you would be required to pay back per month.
- Better credit rating
If you’re struggling to keep up with your current debt repayments each month, your credit score will suffer. By combining all your debts into a single, lower, monthly instalment, it will be easier to make sure that your accounts are paid up each month. In the current economy, you never know when you may need to apply for another loan – always look after your credit rating!
Consolidation Loans Frequently Asked Questions
Living to pay off debt is no way to live. If you’re looking to manage your debt more simply, as well as find the easiest way to keep up with your credit payments while still having enough money left over – consider a consolidation loan. To make the process simpler, we’ve answered some of the most frequently asked questions that you may have.
What is a consolidation loan?
A consolidation loan allows you to combine up to five of your debts into one easy-to-manage loan. It means one monthly payment with a fixed interest rate. For those with many debts to pay off, loan consolidation is a good way to simplify your debt and gain some financial relief.
How do debt consolidation loans work?
To put it simply, you take a larger loan and use those funds to pay off all your outstanding debt through one monthly payment. This amount is usually lower than the various payments combined, meaning you will have more money at the end of the month to service other debts, cover your household basics, or invest.
Debt consolidation loans will also generally have a longer loan term than your original loans or credit cards. This lowers your monthly instalments, making them more affordable. This is especially helpful if you’re struggling to make the minimum repayments on your current outstanding debt.
When is a debt consolidation loan a smart idea?
If, like many South Africans over the past few months, you’re having trouble making ends meet every month, a debt consolidation loan can work for you. Whether it’s a combination of a student loans, credit card bills, car payments and clothing store accounts, a consolidation loan can help to combine all of these debts into one payment. It does, however, still require discipline and commitment for the process to work for you.
How much money can I borrow?
With African Bank, you could qualify for a Consolidation Loan of up to R250 000, which we deposit directly into your bank account.
How much time do I have to pay back the loan?
African Bank offers flexible terms of between 12 and 72 months to repay your Loan.
How do I get a consolidation loan?
Applying for a Consolidation Loan with African Bank is easy. You’re able to apply online, on the phone or at your nearest branch. You must be over the age of 18 to apply for a Loan.
Make sure that you have the following documents handy:
- Most recent proof of income, reflecting three salary deposits.
- Proof of residence, not older than three months.
- Latest bank statement, reflecting three salary deposits.
Are debt consolidation loans bad for credit?
No. You can actually better your finances with a consolidation loan. This is because they help reduce the risk of you skipping a month’s (or more) payment on a debt, which can negatively impact your credit score.
What are the drawbacks of a debt consolidation loan?
While the lower monthly instalments might free up some extra cash in your budget, this shouldn’t be considered as having more money available. This type of attitude can lead you into even more debt! It’s important to use any extra money at the end of the month to pay off your debt.
Another drawback is that while the lower monthly payments may be helpful right now, it does mean that you’re going to be in debt for longer. If you take out a debt consolidation loan, your goal should be to pay off your debt as quickly as possible.
What is a mortgage loan and debt consolidation?
Another way to consolidate your debt is by using your mortgage loan. This means taking money out of your mortgage loan to pay off your outstanding debts, like your credit card or other personal loans. Some consider this as one of the high-risk consolidation loans, as you run the risk of running out of equity on your home. If you use up all available funds, you might not have anything left when you really need it, like after losing your job or in a medical emergency.
Can you still get consolidation loans with bad credit?
This all depends on your personal situation. Apply via our online debt consolidation loans form, give us a call or visit one of our branches and we’ll get back to you on whether or not you qualify.
Credit Life Insurance
With a Consolidation Loan from African Bank, you can rest assured that your credit is insured should anything happen to you that would prevent you from making repayments.
As a Category A Consumer, you’ll be covered (either to settle your outstanding obligation in terms of your credit agreement/facility or pay instalments towards your credit agreement) in the event of death, permanent disability, temporary disability, retrenchment, unpaid leave or short time. Category B consumers will only be covered for death.
We also offer you the option to ‘Choose your Break’. This feature, unique to African Bank, allows you to take a break from paying your Loan for one month. Whether you’re planning on spoiling yourself in your birthday month, need a little extra for your December holiday or need some financial relief after paying up the kids’ school fees, a little leeway helps a lot!
What’s the next step?
While loan consolidation won’t magically wave away your debt, it will help you simplify the repayment process. Plus, it can help you have a bit of extra money available at the end of the month. If you think you could benefit from a Consolidation Loan from African Bank, you can easily apply online, via telephone or at one of our branches. Our friendly contact centre consultants will happily take you through the steps of applying, as well as explaining the terms and conditions that come with the Loan.