Consolidation Loan vs Debt Review

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You have fallen into Debt! With the rising cost of living who can blame you? What is your options? Consolidation Loan? Debt Review (Debt Counselling)?
Let’s compare the two options.

Meet Miss G. She earns a Nett Income of R7 500 per month and must pay R6 005.28 per month on her debt instalments. As you can imagine Miss G was struggling monthly to put food on her table. She had to get out of her debt situation as soon as possible.

To settle her debt, she needed a consolidation loan of R45 772.58.

The problem was that she was already over-indebted and couldn’t qualify for another loan.

Her only option was Debt Review.

Now to compare.

If Miss G could qualify for a consolidation loan of R45 772.58 her payment per month would have been R2 871.50 per month for a period of 24 months with an interest rate of 27.5%. She would have paid back a total amount of R68 916.00 over the 24-month period.

This is how Debt Review helped Miss G.

Firstly, we negotiated with her creditors to reduce her monthly instalments from R6 005.28 to R3 176.41 per month and her average interest rate from 24.55% to 9.68%. She settled her debt within 19 months. Want to guess how much she paid to her creditors over that 19 months period? Only R51 456.62.
Now compare that to the consolidation loan total repayment. She saved a massive amount of R17 459.38 on interest and monthly fees.

Consolidation Loan or Debt Review?
Which one is better?
You can decide…

The problem with “borrowing from Peter to pay Paul”.

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Keeping up with never-ending debt cycles can cause serious long-term effects on your financial security and leave you (and those who depend on you financially) facing difficult consequences. Sadly, the accumulation of debt does not happen all at once but rather gradually over a period of time – before you know it, you are “robbing Peter to pay Paul”, while actually robbing yourself more than anyone else.

With a large percentage of South Africans finding themselves indebted in some way, it is not hard to understand why so many of us find ourselves in the throes of unforeseen financial turmoil. Statistics show that 60% of the population struggle to meet their monthly payments on home loans, vehicle finance and credit cards. In some cases where it becomes impossible to pay back outstanding debt in time, making more debt by taking out a loan payment seems like the only choice. If this is you right now, stop and consider your options by enlisting the services and knowledgeable expertise of Less Debt.

Making more debt or taking out a large personal loan to pay off urgent outstanding bills is rarely a good idea. It only means that you are replacing one debt with another debt and adding more years of repayments to your already over extended account. At the end of the day, you will be drained not only of your money but also of your health and mental wellbeing. By taking out more and more debt and struggling with monthly payments, you could find yourself face higher interest rates, various penalties and even late fees with the potential of being blacklisted.

So, how can you avoid the notorious “robbing Peter to pay Paul” cycle when your finances are overwhelming you? Firstly, it is important to understand the need to always pay bills on time, no matter what. Don’t take out loans you can’t afford or open accounts you know will only make things harder in the coming months, especially one-month loans or pay day loans. A quick fix is not the way to go because the cost of living is rising continuously, meaning more rapidly growing payments if you always use making debt as a way out.

To eradicate the constant woes and worries bought on by ever-increasing debt; avoid more monthly payments and unplanned loans at all costs! Our professional team at Less Debt offer a solution to those struggling to change their lives and improve their finances.

With debt review your monthly debt payments can be reduced with up to 50%. Find yourself finally able to breathe again, knowing that there is an end in sight. Check in with one of our friendly and professional debt consultants today.

Why Debt Review

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It is not uncommon to hear the phrase “debt review” mentioned in hushed voices among colleagues, friends and sometimes even our closest loved ones – although this can come as a surprise to us, almost everyone struggles with money management at some point and it can take just a few bad decisions, hasty purchases and impromptu financial commitments to lead us down a destructive path.

Making debt is a lot easier than getting out of it and usually this lesson is learned the hard way. By losing track and finding yourself living well beyond your means, with so much debt that you can no longer afford to pay it off. This is where many consider the relief of debt review/debt counselling.

Debt review is the first step to bettering a financial situation that is leaving your stomach in knots and your phone unanswered. By allowing a knowledgeable debt counsellor to assist with budget advice, you can start to make the necessary changes to your lifestyle and spending habits.

The official act of Debt Counselling was introduced by the National Credit Act in aid of consumers who find themselves unable to make their minimum monthly instalments, essentially over-indebted consumers. There are many benefits to seeking out help through debt counselling, otherwise referred to as debt review. Debt review offers you a second chance, rescuing you from the dire consequences of being financially over extended and removing the burden and uncertainty that can quickly become too much.

By enlisting the services of debt counselling professionals such as Less Debt, individuals are able to avoid some of the serious repercussions of being unable to pay their debt. These repercussions could include the repossessing of your valuable assets (car, house, etc) or could cause you to become blacklisted.

While undergoing the debt review process with Less Debt, you are also lawfully protected from having your assets repossessed. Through the process of debt review, a debt counsellor will determine that you are unable to make your monthly payments on time and will negotiate with your credit providers to reduce your monthly payment amount, reduce your interest and extend payment periods.

By restructuring your debt; not only can you make your monthly payments on time, you can also sleep soundly knowing that you are on the path to financial stability.