What is Debt Consolidation?
Instead of paying 5 loans (Capitec, Shoprite, loan shark), you take ONE bigger loan to pay them all, and you pay one instalment per month. It can lower monthly payment but may cost more long term.
Can Blacklisted Get Consolidation?
Banks like Capitec, Nedbank, African Bank usually require good credit for consolidation.
Options for bad credit:
– Bayport – Specializes in consolidation, even for moderate bad credit
– OneDebt / DebtBusters – Not a loan, but debt review to reduce payments
– Finchoice – If income stable
– Secured consolidation using car/property equity
Example:
You owe: R5000 (Wonga) + R8000 (Capitec) + R3000 (Foschini) = R16000 at different rates ~25% each.
Consolidation loan: R16000 at 27% over 24 months = ~R856 per month. Instead of 3 payments ~R1200.
When It Helps:
– You have many small high-interest debts
– You can get lower interest than current average
– You won’t take new debt after consolidating
When It Doesn’t:
– You already missed many payments – lenders will decline
– Fee to consolidate is too high
– You continue borrowing
Steps:
1. List all debts with balance, rate, payment
2. Check credit report free on ClearScore
3. Apply to 2-3 consolidation providers only
4. If declined, consider debt counselling (NCR registered)
FAQ:
Q: Will consolidation clear my blacklisting?
A: It can improve if you pay on time. Blacklisting clears after you settle and credit bureau updates.
Q: Is debt counselling same as consolidation loan?
A: No. Debt counselling reduces payments legally, but you are flagged under debt review and cannot get new credit.
Disclaimer: Consider speaking to NCR registered debt counsellor before deciding.