Managing debt can cause considerable financial stress. It’s important to face the challenge of paying off debt head on. To start, consider the debt repayment options available to you. Consider your application for a consolidation loan as the first step on your journey to financial freedom!

What is a consolidation loan?

A consolidation loan is a type of loan that enables you to combine several existing debts into one monthly repayment. The process can save you money, as you will now only have to contend with one monthly payment and one interest rate.

How does it work?

• The debtor applies for a debt consolidation loan that covers all existing debts.
• The consolidation loan pays off the various debts, and the individual is left with one monthly payment for the consolidation loan.
• Typically, debt consolidation loans come with a lower interest rate, or the debtor may be able to extend the loan term for more manageable repayments.
• Your credit record will improve if you settle your debts.

Read more: Ways a consolidation loan can help

While debt consolidation is a good debt relief option, there are things you need to be aware of:

• Qualification Criteria: You must have strong credit score to qualify for a consolidation loan.
• Risk of More Debt: After combining debts, you will need to revise your spending patterns and budgets to ease the burden on your finances.
• Possible loan term extension: Consolidation frequently extends the loan's payback duration, which means you may pay more interest overall, even though your monthly payments may be lower.

Ease the financial stress with a Consolidation Loan from African Bank

If you are struggling with a large amount of debt, do your shopping to compare and consider the debt relief options available to you. At African Bank, you can combine up to 5 loans into 1 easy-to-manage Consolidation Loan to the value of R500 000 and save cash with a lower repayment.

Terms and conditions and affordability criteria apply. African Bank Limited 2014/176899/06, is an authorised FSP and registered Credit Provider (NCRCP7638)