Choosing The best debt consolidation companies in South Africa

How to Choose the Best Debt Consolidation Loans Company in South Africa?

There are a lot of debt consolidation loan companies out there in South Africa and it can be a hassle to select the most appropriate one for your needs. We’ve listed a few criteria on how to swiftly screen the lenders that offer the best debt consolidation loans suited to your financial situation.

What to Look For in Debt Consolidation Loan Companies

Here’s a short guideline in selecting the lender that offers the best debt consolidation loans suitable to your needs.

  • Good reviews

Look for lenders that have a good reputation. A lot of reviews are available online. Check their company profile and examine their experience as a debt consolidation loan company. Look for complaints or any problem customers have experienced when dealing with them.

Check among your relatives if any of them have ever consulted with a debt consolidation loan company. Ask for their experience, the dos and don’ts, and all other information you can extract that you believe will be helpful in your search for the appropriate lender.

  • Fees, interest rates, and repayment terms

These are the main areas you have to look at when selecting a debt consolidation loan company. There are comparison sites and services that allow you to check the rates of different debt consolidation companies, making it easier for you to choose the cheapest one.

The best debt consolidation loans for those with a fair credit rating are those that allow a considerable size of debts to be consolidated. Most banks allow loans amounting to up to R150 000, while some even have a higher upper limit than this.

Interest rates will vary depending on your credit ranking. Those with good credit ratings get the best debt consolidation loan deals. Also, assess if the fees they charge are reasonable enough for their services.

Your lender should offer flexible repayment terms. This can be as short as 1 year to as long as 5 years or more.

Ask your lender if they offer alternative repayment options. Some may allow repayments to be done weekly or every other week instead of every month. This can be a convenient option for you, especially if you’re having trouble budgeting your monthly expenses.

The best debt consolidation loan deals you can get allow prepayments without any penalty fee. This will allow you to pay off your loan faster if you have extra cash on hand.

Debt consolidation loan companies should not hinder you from getting yourself out of debt as fast as possible, regardless if you have a bad, fair, or good credit rating.

  • Transparency

When applying for a loan, lenders conduct a thorough interview to help them select the applicants eligible for their debt consolidation loans. You should do the same on them. Scrutinize and ask all questions you need answered to get to know the creditor better.

Read the fine print, then read it again before committing to any deal. By reading the contract carefully, you’ll be able to spot the advantages and any dangers that can put you in a precarious situation in the long run. After all, you’re the one who will be incurring the debt and all the additional charges accompanying it.

You should be more proactive in asking questions since you’re the one seeking financial assistance. If you don’t ask questions, your lender will assume you understand everything written on the document.

  • Legal and registered

Look for a company that’s registered with the government. These lending companies charge rates in accordance with the limits provided by the law.

Legally existing loan consolidation lenders have to maintain their reputation if they want to get more clients. Rest assured they have your best interest in mind.

Some debt consolidation loan companies feel like they’re in a haste to get you signed with them. Be wary of these type of lenders. They may be promising too many things that sounds too sweet of a deal. If it’s too good to be true, maybe it really is.

Creditors usually are careful in screening their clients, conducting a background check on each of them to know more about the financial problems they are facing. It’s better if they’re thorough in checking your application because this shows how serious and strict they are in doing business with you.

Never touch deals with debt consolidation companies who charge fees just to apply for their services.

Don’t get intimidated by scare tactics that pressure you to sign with them or get you to loan more than you can afford.

Avoid companies that give you a 100% guarantee that your request will get accepted, especially if they haven’t conducted their background check on you yet.

  • Reliable customer service

You should be able to easily contact your lender if you have questions or concerns regarding your loan contract.

It’s better if you can get in touch with them via email, phone, chat, and website contact form. Some may even assign you a specific loan representative that will handle your questions every time you call them.

The Best Debt Consolidation Loans Companies in South Africa

The best debt consolidation loans available to people with good credit rating are those offered by banks and established lending institutions.

  • Old Mutual
  • Nedbank
  • ABSA

and all the big names in the industry offer consolidation loans for you to choose.

Alternative solutions like-

offer more flexible terms in return for slightly higher interest rates.

On the other hand, the best consolidation loans for people with fair credit rating can be found on the same banks discussed above and smaller, alternative lenders.

For people with bad credit ratings, banks may also accept your consolidation loan requests. However, you’ll have lower chances of getting approved by these lenders. The best consolidation loans for people with bad credit history are those from Logical Debt Solutions,Debt Busters , and similar smaller creditors.

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