These articles are general information and not financial, legal or tax advice. Rates, fees and rules change, so confirm current figures with the lender, the NCR or SARS before you act.
If you are juggling several debts, two common options are formal debt review and a consolidation loan. They work very differently.
Debt review
- A registered debt counsellor assesses your finances and negotiates lower, affordable instalments with your creditors.
- You make one monthly payment through the counsellor.
- While you are under debt review, you generally cannot take on new credit, and your record shows it until you are cleared.
Debt consolidation loan
- You take one new loan and use it to pay off several existing debts.
- You then have one instalment, ideally at a lower overall rate.
- It only helps if the new loan costs less in total and you don’t run up the old accounts again.
How to choose
If you can still afford your debts but they are expensive and scattered, consolidation may help. If you are already struggling to pay, or falling behind, speak to a registered debt counsellor first. Use only counsellors registered with the NCR, and be wary of anyone who promises to make your debt disappear.
General information only, not legal or financial advice.
Add up everything you owe and compare the total cost of each route before deciding.