Being over-indebted is probably one of the biggest hurdles on the road to financial fitness and once in bad debt many don’t how to get out of it. When it feels like you’re drowning in a sea of bad debt, debt consolidation can be your lifejacket for debt relief.
This article outlines some of the important things that you need to know before you think about applying for a debt consolidation loan.
Applying for a debt consolidation loan can see you living a debt-free life sooner than later, provided that you are committed to achieving a clear debt record and becoming more vigilant about your debt management. If you feel like you’re drowning in a sea of bad debt, a consolidation loan can be your rescue, provided that you are ready to become more responsible with your finances and commit to getting out of debt.
Debt consolidation should be considered if your monthly debt repayment expenses are higher than what you can afford. The road to debt recovery is long and challenging but ultimately rewarding. If you are dedicated to slay the debt dragon, a consolidation loan might just be the answer you have been looking for.
Your credit score can affect the outcome of your debt consolidation loan application and also whether you will be able to afford the newly proposed repayments. Having a good credit score can reduce the interest rate charged on your consolidation loan. Having a bad credit score on the other hand can see you paying a much higher interest rate, as the financial institution will see you as a high-risk customer.
Debt consolidation can affect your credit score in a positive or negative way depending on your behaviour. After successfully applying for debt consolidation, credit providers will consider your other accounts as being settled or paid in full, as all your debt is restructured into one single loan. This will have a positive effect on your credit score. Another way to improve your credit score in the long term is to ensure that make your consolidation loan repayments in a timely manner.
If managed and applied correctly, the long-term benefit of debt consolidation can be positive to your financial wellness – it is up to you to determine the outcome of this journey.If you are ready to make a change for the better, speak to one of our financial advisers on the various debt consolidation loan options available to you or apply online now. Go back