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Seeking advice on ditching a loan shark

Jan 30 2017 06:38
Liziwe Ndalana

A Fin24 user who is stuck with a loan shark seeks debt consolidation to alleviate her debt burden.

She writes: "I am paying R13 500 towards my loan shark interest; I would like to ask is it not possible to get a loan to consolidate my debt so that I may be free? I am blacklisted with ITC."

Wikus Olivier from Debt Safe answers:

Yes it would be possible to consolidate your debt into one instalment.

Short term loans, typically the ones done by loan sharks, carry high interest rates. Consolidating your debt might give you a better interest rate and improve your cash flow.

It is important though, to make sure that you actually use the consolidation loan to get rid of your other debt. That said, taking out a consolidation loan is not necessarily the best solution.

ALSO READ: Pros and cons of debt consolidation

The only thing you achieve with a consolidation loan is to move the debt from one place to another.

Debt review on the other hand also provides the same feel as a consolidation loan with one single consolidated instalment, but with the key difference - that you actively get rid of your debt.

Considering the fact that you are already blacklisted, debt review might be your only option as a bank would most likely decline your application for a consolidation loan. I hope the information was useful to you.

ALSO READ:

Under debt review and retrenched - what now?

How debt review process works and what to do to quit

Clearing your name after debt review

*Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

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money  |  money clinic  |  debt

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