You live in Johannesburg and you earn employment income every month, but you find it difficult to manage your existing debts and to repay them timely. In this situation, you should consider debt consolidation in Johannesburg. This financial solution involves taking out a new loan called debt consolidation loan, which you will use for paying off all of your current debts.
How can you consolidate your debt in Johannesburg?
The new loan will have lower interest rate compared to the average rate on your existing loans. It will have a fixed rate as well. You will not have to worry about fluctuations in your monthly payment. Instead of making multiple monthly debt payments, you will make a single one. This will help you manage the repayment effectively and avoid missing payments. You will be able to manage your finances better as well and this will help you avoid getting into more debt.
Debt Consolidation is effective, but not FREE
Debt consolidation in Johannesburg is an effective tool for debt management, but it is not free. The initiation of the new loan involves costs which you will have to pay out of your pocket. Additionally, the term of the new loan will have a direct impact on the cost of consolidation. The longer this term is the more interest you will have to pay. You should consider using financial advisory services for finding the optimal solution for you. Debt counselling can help you greatly as well.
Secured debt consolidation is the option which most people prefer. It involves the securing of the new loan with collateral which is typically the house of the borrower. You have better changes of getting a secured loan as with such credit instruments the risk for the lender is lower. Furthermore, you can expect a much lower interest rate compared to what you pay on unsecured personal loans and credit cards.
Alternatively, you can opt for unsecured debt consolidation loan. It will have higher interest rate, but it will still be lower compared to the average rate on your current loans and credit cards. The unsecured loan will have a shorter repayment term and this will help you save on interest payments.
You have to decide which of the two options for debt consolidation in Johannesburg will be more suitable for you. For this, you can use the services of a professional financial advisor specialising in this type of financial transaction. Once you decide on the right option, you can focus on choosing the best loan from the ones available in the market at present.