A consolidation loan can help you get out of debt faster.

26/07/2019

Putting all your debt in one loan basket

If you landed on this informative blog because you Googled how to get out of debt you are one of millions of people who are asking that same question.

A consolidation loan is also a common topic searched on the internet by people looking for advice on debt management.

A recent article, SA plagued by personal debt, on News24.com, states South Africans are “being crushed under the weight of personal debt, with consumer debt totalling nearly R1,7-trillion - nearly as much as the government’s debt of more than R2-trillion.”

In addition, the article talks about South Africans neglecting to save money, with World Bank research indicting as many as one third of adults do not dedicate any money toward savings.

You may identify with this and be feeling that you are drowning in debt.

Your question is how do I consolidate my debt?

Let’s look at what debt consolidation is.

Simply put, this is the opportunity to combine all your debt into one single loan.

The African Bank consolidation loan allows you to bundle up to five loans into one single consolidation loan of up to R250 000 and get one repayment.

For example, if you take out a loan of R250 000, you can settle all your debt – should this be, for example, three store credit cards and two bank credit cards – and then only have to worry about the one easy monthly repayment back to the bank which granted you the loan. 

The advantage of this type of loan is that it can help to lower the total cost of credit and help you to pay off debt faster. The other bonus is that you now only have to worry about one repayment a month which means you will be less likely to make a late payment.

While consolidating your debt is a good way to move out of the debt trap, it is wise to reflect on your spending habits and avoid falling back into debt.

If you are one of those people desperate for a get out of debt plan, it is important to understand the basics of debt management and how you got into this situation in the first place. 

No matter what your financial situation, you will benefit from sticking to a budget.

4 things a budget will help you do:

  • Set goals. When you have financial goals you make different decisions about spending.
  • Examine your income and expenses. People think they know what they earn and spend, but few of us really do if we aren’t noting it all down.
  • Identify your wants and needs. A budget makes this clear and helps you prioritise spending. Do I want a new pair of shoes or do I need a new pair of shoes?
  • Save money. It may take a month or two for you to get into the swing of your budget, but once you are sticking to it you may be pleasantly surprised at the fact you do actually have money to save.

Debt can be managed well with simple financial tools, such as budgeting.

It is also often a case of breaking it down into manageable chunks and viewing it this way instead of as one huge imposing mountain you cannot surpass. This informative African Bank blog offers more insight on how to do this.

Up Next

Surprise your dad this Father’s Day
Sunday is Father’s Day! While many of us can’t gather around the table to share a special meal with those we call “dad”, there’s plenty of ways to make this Father’s Day meaningful. Here are some ideas.

Publish Date: 19/06/2020
Read more
Personal Loan up to R250 000 Online
Get a Personal Loan up to R250 000 from African Bank. Enjoy our low interest rates and flexible repayment schedule, with easy online loan application. We Say Yes More.

Publish Date: 07/07/2020
Read more
Tips to cut costs and save money
In a time of economic uncertainty, we could all use some tips and tricks to guide our spending. These are a few of the things you can do to cut costs and save some money

Publish Date: 13/07/2020
Read more
Protect yourself against card skimming in South Africa
Card scams are on the rise in South Africa, leaving many completely blindsided and with empty bank accounts, or debts they didn’t sign up for. How did the theft happen? We show you how in this blog

Publish Date: 16/07/2020
Read more
Why opening a fixed deposit investment account can benefit you?
Invest today with a Fixed Deposit from African Bank. Enjoy SA’s best investment rate at 12.33%, along with an easy online application. We Say Yes More

Publish Date: 05/08/2020
Read more

About African Bank

Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.