Free up your cash flow with a Consolidation Loan
Life during the National Lockdown has not been easy! Can you relate? Many South Africans have been forced forced to take short time or compulsory unpaid leave, and some have been retrenched. For those with many debts to pay off during this difficult time, a consolidation loan is a good way to simplify your debt and gain some financial relief. We’ll break down how a consolidation loan works here, so that you can make an informed decision about your financial future.
What is debt consolidation?
If you’re determined to face your debt with discipline, a debt consolidation loan is a powerful tool that could pave the way for a healthier financial future. So how does debt consolidation work?
A debt consolidation loan allows you to combine a number of different debt repayments into 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.
So, which debts can you consolidate? We explain these for you below.
- Student loans: Many students take out a new loan every semester to help cover tuition, fees and other costs. Should you have student loans in your name, a consolidation loan might be worth considering.
- Credit cards: You can build a solid plan to get rid of credit card debt once and for all, and debt consolidation might help you to reach your goal sooner.
- Personal loans: Whether you’re trying to simplify your finances or get out of debt quicker, it might make sense to consolidate high-interest personal loans as well. If you’ve taken out personal loans in the past, you might be able to save money on interest by securing a new loan with a lower interest rate.
Who should consolidate their debts?
Consolidation loans aren’t for everyone. It requires the discipline to stay within your means and resist the temptation to take on more debt. The main reason you would consolidate your debts is because you can barely keep up with your monthly payments. That’s when a consolidation loan can be a valuable tool in getting your finances on track during the Lockdown.
Ready to apply for an African Bank Consolidation Loan? It’s a quick and easy process to apply for one, and you can upload your documents through our website. Click here to get started. These are the documents you’ll need:
- Identity document
- Latest payslip
- Latest bank statement reflecting three salary deposits
Consolidation Loans aren’t a magic wand that also makes bad financial decisions disappear. However, when used properly, it can play an instrumental role in improving your finances, your credit record and, ultimately, your ability to achieve your financial goals, even during difficult times such as these.