Debt Consolidation:
When Should You Apply for Loan?

Debt consolidation loans are available in South Africa when you are in severe financial trouble and have problems repaying your credit providers. The common pointers to indicate you need help are when:

• you use one credit card to pay another.
• credit collectors call constantly
• strange people knock on your door to serve a summons
• you start borrowing from Peter to pay Paul
• you're blacklisted or have judgements against your name
  

You're in a downward financial spiral which is getting out of hand, leaving you with sleepless nights. What are your options? The last thing you'd want to do is to file for bankruptcy. It could take up to ten years to clear your name.

Before You Apply for Any Loans

The most logical choice is to draw up a list of income and expenses. List all your current expenses, monthly subscriptions, even the week-end DVD rental for the kids. Try to be as thorough as possible. Include daily items such as bread and milk too. Do you know how much you spend on magazines?

Scrutinize the list and cancel any subscriptions, (including magazine subscriptions), the DSTV as well. A good start is to get new car insurance quotes. Repay your consolidation loans faster with the money you will save on insurance premiums.

If you're still in way over your head after your new budget, contact your creditor providers and negotiate lower payments. In the current economic climate, they will probably be very helpful. If you do the negotiating yourself, you'll save the fees you'd have to pay to a debt counsellor.

When you're unsuccessful to get to an agreement with your creditor providers your next option is to:

- apply for additional financing on your home loan
   (even if you are blacklisted)

- apply for a unsecured personal loan

- consider debt counselling and

- apply for a loan to consolidate your debt in South Africa

Solving your debt problems is easier than most people realize.