Publish Date: 24/06/2019
Debt counselling vs debt consolidation- options for debt relief
Many people struggle to get out of debt because they're not sure where to even start. Here are some of the questions you may ask yourself.
We understand that the process of finding a solution can be difficult because there’s so much to consider. So it helps to understand what your options are. We break down two of the ways that can help you clear debt.
Consolidate your debt
A debt consolidation loan is a powerful tool that helps to simplify your finances. It allows you to turn several debts into one cost-effective payment. A debt consolidation loan can allow you to regain control of your finances, if you are ready to face the problem with discipline.
How does a debt consolidation loan work? Below, we unpack how you can benefit:
Read more: Ways a consolidation loan can help
Although debt consolidation has its advantages, there are some disadvantages you need to consider:
Debt counselling, also known as debt review, is a debt management solution for people who are over-indebted and find it difficult to pay their debts monthly. The National Credit Act (NCA) introduced this as a formal debt rehabilitation programme that makes it easier to clear your debts by lowering your monthly payments, as well as the interest you pay on them.
This process usually takes about three to five years and during this period, you aren’t allowed to use your credit cards or take on any more debts.
Like any option, there’s disadvantages to debt counselling too:
If you are struggling with a large amount of debt, do your shopping to compare and consider the debt relief options available to you.
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'.