Debt consolidation loan Advantages and Disadvantages
What is Debt consolidation?
Debt consolidation loan is a loan that enables you to settle all your high-interest debts and close these accounts, leaving you with only one debt repayment per month to the credit provider who granted you the consolidation loan.
Look out for illegitimate, fraudulent debt consolidation companies out there. Which will usually charge thousands of rands in fees, offering penalties, an injured credit rating, resulting in untrustworthy South African consumers. If you have a poor credit score and a company is offering you debt consolidation advice then you should start to become suspicious. The interest rates on these loans will be high and the terms, mostly unfavorable. Many people agree to terms that they don’t understand out of desperation, telling themselves that they had no other choice.
If you are considering debt consolidation loan, understand the advantages and disadvantages.
Debt consolidation companies argue that borrowing money at a low-interest rate to pay off loans or credit cards at a higher interest rate can save you money, or help you pay off the debt sooner. other advantages include having fewer payments to make each month, and less likelihood that you’ll be late on a payment, Sometimes, the interest payments are even tax deductible. For example, in many instances interest paid on loans secure
Depending on the terms of your new loan, it’s possible you can actually end up paying more in interest over the life of the loan, or that you’ll end up more deeply in debt. you are putting the pledged property at risk. If you can’t pay the loan back, you could lose your house, car, life insurance, retirement fund, or whatever else you might have used to secure the loan. The term of a secured loan may also be longer than the term of the debt obligations that you consolidated. This could cause the total interest that you pay over the life of the consolidation loan to be greater than the interest would have been on the individual debts, even though the monthly payment is lower.
Debt counseling does all the things that debt consolidation help can’t do for you. Debt review protects you, your credit profile, and your assets and also prevents credit providers from taking legal action against you. Debt rescue helps you become debt-free, without any risk! Contact National Debt Advisors (NDA) today to find out if you qualify or get debt review advice right here.