Debt Consolidation vs Debt Review in South Africa
Understanding Your Debt Relief Options
Many South Africans consider debt consolidation loans when faced with multiple debts. While consolidation can be helpful for some, it’s not suitable for everyone — especially if you are already over-indebted. In fact, in most cases, over-indebted consumers will not qualify for traditional consolidation loans, and here’s why:
The Reality of Debt Consolidation Loans
- High Interest Rates & FeesÂ
Added costs can make repayment harder. - More Credit = More DebtÂ
Loans increase your overall debt burden. - No Legal ProtectionÂ
Creditors can still take legal action. - Often UnaffordableÂ
Especially for those already over-indebted.
Why Debt Counselling is a Better Option
Debt counselling, also known as debt review, doesn’t add more debt. Instead, it restructures your current repayments into one affordable monthly instalment, while providing legal protection against your creditors.
Example Comparison
Original Debt Payment:
R7,056/month
Original Debt Payment:
R3,600/month (affordable + legal protection)
Consolidation Loan:
R5,432/month (still unaffordable + more debt)
Debt counselling doesn’t add more debt – it’s a structured solution to finally become debt-free while protecting your assets.