When you are in a panic about your financial affairs you will most probably find two hot topics about debt. Debt review and debt consolidation.
But what is the difference of debt review and debt consolidation?
Debt review is the process where you are placed under the care of a debt counsellor regulated by the National Credit Act. You will, with professional assistance of the debt counsellor, determine your current budget. Based on that your debt counsellor will propose better repayment terms to your various creditors. The result will be a monthly structured payment confirmed by a court order. Your credit providers may not further communicate or chase you for settlements.
Debt consolidation loans is merely a big, lump sum amount that will be used to repay all your various credit providers / loans. A property debt consolidation loan company will make sure that all your current debt are being settled, but this seldom happens. The interest on these type of loans will be quite high and you are still in exactly the same financial position as before.
We would never advise someone to apply for one loan to settle another. It is much better to start with a payment plan to start settle your debt. You want to get to a point where you do not have any bad credit debt.
We hope that the above article assisted you. Contact one of our consultants below for assistance with debt review questions or applications.