Consolidate debts to increase your cash flow

Home Loan News and Tips: Banks offer Home Loan advice during tough times

The current climate of high interest rates, and rising food and petrol prices is driving up the average cost of living in South Africa.
In response to this the four major Banks – ABSA, Standard, FNB and Nedbank – have come out unanimously agreeing that homeowners should look to consolidate debts into one low interest account.

The easiest way to lower your monthly expenses is to consolidate all your high interest [short term] debts such as Personal Loans, Credit Cards and Car Loans into one low interest account – your homeloan.

Gavin Opperman of ABSA Home Loans says: “Consolidating debt into a single loan provides our customers with a single, affordable debt repayment on a monthly basis.”

The interest charged on your Home Loan account is about 1% below prime, far less than your credit cards which is often well above prime.

[If your home loan interest rate is to high – click here to get a better rate]

The other advantage that debt consolidation offers is an Extended Loan Term, which lowers your total month expenses. Although you’ll be increasing your monthly cash flow, extending the loan term would mean paying more interest.

Speaking to the Sunday Times, Standard Bank Home Loans product director Shaheen Adam said although debt consolidation made sense, ideally consumers needed to be frugal with their expenditures and should try to pay off short- term debt such as credit card repayments sooner, even after consolidation, to benefit from lower interest rates.

John Loos of FNB Home Loans said FNB agreed that extending short-term debt into a longer term was not always good, but current economic conditions necessitated people looking into the consolidating option.

And, Nedbank Home Loans have setup a debt counselling department to assist with credit restructuring occurs and make debt more affordable to their clients.

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10 Comments on “Consolidate debts to increase your cash flow”

  1. Hi There

    My husband and I would like to consolidate our debt and possibly apply for a homeloan to buy the place we are currently renting. Please advise if you could assist and how the payment for your services work as we cannot afford and additional huge payment.

    thanks

  2. Ek wil graag my skuld konsolideer. Kan julle my dalk laat weet hoe ek te werk moet gaan? My verband is op die oomblik by ABSA maar dit sal vir my beter wees as alles by een bank is aangesien my salaris ook by FNB inbetaal word.

    Skakel my asb. by 021 8084889 tydens werksure vir verdere inligting of epos vir my by bostaande eposadres?

    Vriendelike groete!
    Willemien Aucamp
    Ons het ongelukkig nie selfoonontvangs in die kantoor nie. As julle my egter na ure wil berei op my selfoon is julle welkom. My selfoonnommer is 0832570547.

  3. Consolidating your debt can mean you are extending the inevitable. Overdebtedness. You are borrowing from Peter to pay Pall. You need to change your spending habits first. Cut on the expenses.

    Consolidating will help a lot if done correctly. Some people pay off there credit cards, but use them again after a month or 2. Close the account and cut up your cards. That will force you to change your spending habits.

    People should look at other ways a repaying debt in stead off trying to borrow them out of debt. You are only digging a bigger hole for yourself. Rather go to your creditor and negotiate a better payment plan. Or get a counsellor to do it for you.

  4. I am sinking in debts and I tried to consolidate my debts with Nedbank, because my bond is with them, but just because my accounts are on arears they refuse to assist me. I appeal two times, but failed. Please help I am in trouble.

  5. Not only that. they also reprice the consolidation at their new credit rating level. I had a loan of R1.3m at P-0.2 and asked to have R100k car loan consolidated with my mortgage and my new rate is P+2 leading to me paying an additional 2k on the original mortgage though on the 100k its now lower repayments. Just coz I have asked for a consolidation…huh!

  6. Banks say that they can offer prime less 2%, but i have yet to have witnessed or heard of this happening, especially not to us the good debt payers. Instead we are disadvantaged with home loans of prime less 1.4%. Not fair!!!

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