Make a plan

Myth busting debt consolidation

people consolidation

Type ‘debt consolidation’ into Google and the chances are good you’ll get a lot of contradictory information, from links suggesting it is the root of all financial evil to ads that claim it is the solution to all your money problems.

Of course it’s not as simple as either the critics or supporters suggest. Debt consolidation isn’t for everyone, but may be a useful tool to get your financial affairs under control.

Before busting some of the myths about debt consolidation a good place to start is understanding what it is. The simplest explanation it that it involves taking out one loan in order to pay off a number of smaller debts.

Typically you would take out a longer-term loan to pay off a range of short-term debts such as store cards.

Critics argue that the only real advantage of doing this is that rather than having a whole lot of smaller creditors to manage, you have one large one.

While this is true, there are potentially some other benefits. Consolidation loans usually have fixed interest rates so it’s easier to budget and manage your financial affairs. Only having one loan to pay also means you’re less likely to miss payments, something that could impact your credit rating.

Consolidating your debt can also save money on service fees and debit-order costs. Depending on how the loan is structured it could also improve your cash flow by requiring smaller payments, over a longer period.

Another concern raised about consolidation loans is that because the loan is easier to manage and smaller repayments can free up some cash each month, consolidation encourages reckless spending.

While this may sometimes be true, people often take consolidation loans because they are trying to be financially responsible and manage their debt better.

Another myth has resulted from a perception that debt consolidation is only for people who can’t manage their money properly.

This simply isn’t true. Consolidation is a financial tool that’s used by businesses and many financially savvy people to simplify their financial affairs, save on administrative costs and free up cash.

If you are considering consolidation as a means of managing your debt, you can use this account consolidator tool to decide if it’s an option that might work for you.

Pulse

Pulse is a FREE financial wellness tool that allows you to check and improve your credit rating.

Find Out More
Personal Loan

A Personal Loan is a convenient way to take care of your personal and family needs and goals.

Find Out More
Consolidation Loan

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

Find Out More
Insurance

You could save on your monthly premiums by insuring your car and home with the same insurer.

Find Out More
Medical Aid

Find medical aid cover that best suits you and your family’s needs.

Find Out More
24%

of customers use loans for consolidation

24%

of customers use loans for renovations

12%

of customers use loans for education

Our Sponsorships

Read more about how we support grassroots Rugby through our Currie Cup Sponsorship.

Read More
Job Opportunities

Thinking of working for DirectAxis? Why not explore what it means to work at DirectAxis.

Read More
Customer Care

We pride ourselves on delivering the best possible customer service. Get in touch today.

Read More
Social Initiatives

Find out more about the corporate social initiatives we're undertaking to deliver positive change.

Read More

Your direct connection to Financial Services. Direct Axis SA (Pty) Ltd (Registration no 1995/006077/07) is an authorised Financial Services Provider (FSP 5 and FSP 7249) © Copyright 2018 
Privacy Policy - Legal Documents - Sitemap
This page is protected by reCAPTCHA, and subject to the Google Privacy Policy and Terms of service.

Loan repayment terms range from 24 to 72 months. The maximum interest rate with regards to a DirectAxis Personal Loan is 27.5% per annum (compounded monthly). Your rate and initiation fee will be determined according to your personal risk profile.
An illustrative example of a loan at an interest rate of 27.5% 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 110 013.57 which is a maximum Annual Percentage Rate (APR) of 30.74%.