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Creating Cash Flow in a Constrained Economy

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“It’s the economy, stupid,” is a variation of a now-famous line used in Bill Clinton’s 1992 successful presidential campaign against George HW Bush. 

It neatly summarised how out of touch Bush was with ordinary Americans struggling to make ends meet. 

At the other end of the world, 27 years later, most ordinary South Africans can still identify with the sentiment. 

Last year, under the previous Minister of Finance, VAT increased to 15% as government struggled to raise the tax it needed. Indications are that growth in 2019 will disappoint again. 

For most South Africans this will mean pulling an already stretched belt even tighter as they struggle to find the cash flow to make ends meet. 

In some households this may be difficult as it might not be obvious where to make any more cuts. 

For people in this situation, consolidation loans are becoming more popular to free up some cash flow. 

Nearly a quarter of DirectAxis’ cusomers use loans to consolidate debt. 

What is a consolidation loan?

As the name implies, a consolidation loan combines a lot of smaller debts into one loan. Usually these are short-term debts, such as retail accounts, which attract higher interest rates. 

Benefits of consolidation

  • An advantage of debt consolidation is that it’s easier to repay a single loan than having to manage a lot of accounts.
  • Another is that the repayments are fixed making it easier to determine your monthly expenditure. 
  • A single, fixed monthly payment may mean you can avoid multiple service fees and debit-order costs.
  • Paying back the loan over a longer period than short-term debt can result in a lower monthly repayment, freeing up some cash flow each month. 

Should i consolidate my debt?

Consolidation loans aren’t for everyone. Each application is carefully assessed to ensure that the customer can afford the repayments. You can try out our Debt Consolidation Loan Calculator to see if you could improve your monthly cash flow.

How does debt consolidation work

When you take out a consolidation loan, the loan provider requests settlement on your behalf and lets you know how much the accounts will be settled for.

To get the full benefit of consolidation, what’s important is to avoid re-opening or continuing to use the accounts that have been settled.

How to appy for a debt consolidation loan

Apply online via our Debt Consolidation Loan Application Form or call us  on 0861 243 556 between 8 am and 8 pm Monday to Sunday. 


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Consolidating can be an effective way to manage your finances and increase your cash flow.

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DirectAxis is a business unit of FirstRand Bank Limited, an Authorised Financial Services and Registered Credit Provider, NCRCP20. Direct Axis SA (Pty) Ltd, Reg no. 1995/006077/07, an authorised Financial Services Provider, FSP7249 & FSP5. 108 De Waal Road, Diep River 7800.

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Loan repayment terms range from 24 to 72 months. The maximum interest rate with regards to a DirectAxis Personal Loan is 26.25% per annum (compounded monthly). The initiation fee is based on the loan value up to a maximum of R1 207.50. Your interest rate will be determined according to your personal risk profile.

An illustrative example of a loan at an interest rate of 26.25% per annum would be: Loan amount R50 000 plus a once-off initiation fee of R1 207.50 and a monthly admin fee of R69.00, over 72 months.

The total cost of the loan will be R 107 130.34 which is a maximum Annual Percentage Rate (APR) of 29.49%.