The South African economy suffered a huge blow during the global financial recession of 2008/09. The main victims of this turmoil were the locals who lost their job. As a result, their financial condition deteriorated greatly. Their entire savings were used for meeting day to day expenses. Eventually, they failed to pay their loans and other debts such as utility and credit card bills.
However, debt consolidation can really come as a blessing for those people who are struggling with a poor credit rating and those who have been blacklisted with the Credit Bureau.
There are many companies which provide debt consolidation services nowadays. However, it is important that you always approach a company which has many years of experience dealing with such cases. They must be approved to provide such services by the National Credit Regulator in South Africa. There are many debt consolidation organizations in South Africa that would be willing to provide you with the best possible services. At the same time, you need to make sure that you check their policies and their programs before selecting one.
Debt consolidation in South Africa basically involves merging all your unsettled liabilities into one account. The account is managed by the debt consolidation company. You will be provided with a consultant who would give you assistance in this regard. They would sit down with you to go through your expenditures and income and study your financial situation. After this, the company will contact all of your creditors and a repayment plan would be offered to them on your behalf. They will negotiate the terms and conditions for the repayment of the principal amounts and the interests. After all of your lenders have accepted the proposal of the company, all your outstanding debts will be settled with the use of the new loan. You will then have to pay your debt to the consolidation company in the form of monthly payments with a much lower interest rate.
It is recommended that you do not fail on your payments this time round. Paying the monthly instalments on time would definitely help to improve your credit rating and have your name removed from the list of blacklisted in South Africa. However, keep in mind that your credit score would only be changed if you clear all your debt. After that, you would be eligible for the loan programs and credit facilities offered by various banks and financial institutions in South Africa once again.
While the concept is very simple, debt consolidation is never an easy decision. Use an online comparison platform to find the best service in South Africa.