How does a Consolidation loan work

A consolidation loan was designed for people who have too much debt or for those who have multiple accounts to pay at the end of the month, having multiple accounts or multiple loans to pay at the end of the month might put you in a bad financial retress and you will end up not having enough money to survive the month ahead due to the fact that you are broke and you can not afford the living.

How does a Consolidation loan work

A consolidation loan will help you ease your debt by combining all your monthly payments into one, this helps you reduce the amount that you were paying at the end of the month and also reduce the interest rates. A consolidation loan provider does everything for you, they are the one who will be doing negotiations on your behalf to all lending providers that you have a loan with.

Once the agreement is reached then you will be able to pay that particular amount via your chosen consolidation loan provider.

What are the benefits of a consolidation loan

In South Africa we have a lot of people who are in debts and can not afford to pay their debts, this is due to the fact that they have multiple loans that they are paying and they cant afford to pay them all at once, this could be because the debts cost more than what they are earning.

So with a consolidation loan you can solve your debts problems by combining all your debts into one monthly installment that is very lower than what you were paying.

With a consolidation loan you get the below benefits:

  • A single fixed monthly payment
  • Lower monthly payments on your qualifying credit; consolidating debt frees up cash
  • Combine up to 5 loans into one single consolidation of up to R250 000
  • Get one lower repayment
  • Debts peace of mind

Requirements to apply for a consolidation loan

To apply for a consolidation loan you will need to meet the below requirements, please note that this is loan service provider dependent:

  • Most recent proof of income, reflecting three salary deposits
  • Proof of residence not older than three months
  • You must be over 18 to apply for a Loan
  • Latest bank statement, reflecting three salary deposits
  • You must be a South African to apply

How to apply for a consolidation loan

You can apply for the consolidation loan by going to any banks branch that you prefere, or to the bank that you are banking with, you can also apply online as there are a lot of online loan providers.

Consolidation Loan Providers

There are a number of consolidation loan providers below I have just listed a few of them that are really good at this:

  • African Bank Consolidation Loans
  • Nedbank Consolidation Loans
  • Standard Bank Consolidation Loans
  • FNB Consolidation Loans
  • Direct Axis Consolidation Loans
  • Bayport Consolidation Loans
  • Metropolitan Debt Consolidation Loan
  • ABSA Consolidation Loans
  • Consolidation Loans at Old Mutual

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