Recent research indicates that many South Africans are battling with over-indebtedness. The big problem seems to be short-term, high-interest debt, such as credit cards, personal loans and store credit.
The shocking statistics further indicate that consumers owe more than 75% of their monthly pay to creditors. In 2013, between April and July alone, over 10 million South Africans applied for loans.
As many as 58.83% of South African consumers are struggling to repay their credit card debt.
Fortunately the National Credit Act has made it possible for debt remedy solutions to be readily available for consumers.
One of these solutions is debt consolidation.
Why is debt consolidation a simple, steady and efficient solution?
It is an effective way of taking control of debt and merging retail store debt.
It is a useful tool for creating an opportunity for a person to begin improving their financial situation.
By choosing debt consolidation you are able to ensure that your creditors are paid off and that you service only a single debt repayment. This may help to show creditors that you are attempting to be more responsible with your finances.
It may result in a lower monthly instalment, with a lower overall interest rate being paid.
A good lending institution will negotiate a low interest rate on your behalf. This will give you the benefit of paying a lower monthly instalment.
It may help an individual to improve their cash flow.
Debt consolidation may result in you being left with extra cash at the end of the month. Remember that this process requires financial discipline, so make sure that you change your financial habits.
Individuals are left with one remaining creditor, instead of multiple creditors.
In South African there are numerous lending institutions that specialise in providing debt consolidation solutions. Some are micro lenders, while others are mainstream lenders. Make sure that you use the services of a lending institution that is NCR-registered.