Debt Management
Debt management aims to assist consumers with servicing their debt. Some banks offer a service whereby a consumer can consolidate his debt by using his home loan account. Under such an arrangement, the home loan repayment period is extended, often up to thirty years. This lowers the monthly amount and eases the consumer’s cash flow. In many cases, this period can be decreased again later without incurring additional costs.
Of course, this also means paying more interest and this can turn out to be very expensive when taken over a very long period. The home loan extension option is therefore only advisable as a last resort and is strictly a short-term debt management solution. Once the consumer’s financial situation has improved, it is recommended that he should revert to the shorter repayment period.
Another home loan-related debt management tactic is to have your home loan interest rate fixed. The fixed rate is usually enforced over a pre-agreed period and may not be terminated before the period has elapsed. Normally, this would require a higher repayment amount, but you are protected against interest rate increases during that period.
Voluntarily entering into a process of debt counselling is another way of managing your debt, especially for people who are over-indebted. Under the debt counselling process, the debt counsellor negotiates with your creditors and banks to negotiate favourable repayment terms. Your debt is consolidated to one monthly amount instead of several smaller ones. Once you are under debt counselling, the credit bureaus are informed, as well as your creditors, and you do not have access to additional credit until all your debt has been paid in full.
If you are still coping with your payments, but need some relief, some debt management companies can help you manage your debt without having to enter into debt counselling. They can organise a more affordable monthly budget and facilitate in communicating with creditors.
Consumer Assist:
- provides consumers with simple, easy to understand information on the debt review process, and
- introduces consumers to experienced Debt Counsellors who have agreed to adhere to the Consumer Assist code of conduct:
- to act in the consumers' best interest
- to comply with NCR fee structure
- to offer service excellence
- to always act with integrity
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 For more information contact our call centre on 0861 21 22 23.
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