No true consolidation loan

There are some credit providers who offer consumers what they call a “consolidation loan”.

These loans can be used to take all the various loans (or credit) a consumer has with various creditors and lump them all together (by paying them off with the new big loan) into one single payment.

Interestingly a consolidation loan is a type of credit which is exempt from a reckless credit investigation.

As yet, no credit provider in SA has registered a “consolidation loan” product with the NCR. (A requirement of the NCA if reckless is not to be applied)

So yes, consumers can get loans called “Consolidation Loans” and can use them to consolidate debt but these are not truly such in terms of the Act.

They can still fall into the realm of reckless credit if they are granted to consumers who cannot afford to repay them.

If you’re considering a consolidation loan, it’s crucial to understand the nuances and potential risks involved. While some credit providers offer “Consolidation Loans” to combine various debts into one payment, these are not officially registered products with the NCR and can be considered reckless credit if you cannot afford to repay them. For a safer and more reliable solution, reach out to our expert debt counsellors at Zero Debt. Simply call us at 087 702 1738 or visit our contact page to get started. Don’t have the time? Request a Free Call Back, and one of our counsellors will reach out to assist you. Zero Debt is a certified Debt Counselling company, dedicated to guiding you toward financial independence.