What Is Debt Consolidation?
Pros, Cons, and Your Alternatives in SA
Updated June 2025
Struggling to manage multiple debts? You’re not alone. Many South Africans turn to debt consolidation or personals loan to pay debt hoping to simplify their finances. But is it the right solution for everyone?
This guide will help you understand:
What debt consolidation is (and what it isn’t),
The pros and cons, debt review vs debt consolidation
How it compares to debt review,
And how to get the right help.
- getting a debt consolidation loan with bad credit
Debt consolidation means combining several debts — such as credit cards, loans, or store accounts — into one larger loan. The idea is to have a single monthly payment instead of juggling multiple creditors.
Typically, this is done by:
The Pros and Cons of Debt Consolidation
✅ Benefits
- Simplifies repayments – One due date, one amount.
- Lower interest (sometimes) – Especially if your credit score is good.
- May improve credit score – If managed responsibly.
❌ Drawbacks
- You need a good credit score – Many applicants are declined.
- Risk of falling deeper into debt – If you keep using credit afterward.
- No legal protection – Creditors can still take action if you miss payments.
Debt Consolidation vs. Debt Review: What’s the Difference?
Many people confuse debt consolidation with debt review – but they are not the same.
| Feature | Debt Consolidation | Debt Review |
|---|---|---|
| Requires a new loan | ✅ Yes | ❌ No |
| Based on good credit score | ✅ Yes | ❌ No |
| Legal protection from creditors | ❌ No | ✅ Yes |
| Reduced Monthly payment adjustment | ❌ No | ✅ Yes |
| Reduced interest rates by consent of credit provider | ❌ No | ✅ Yes |
| Goal | Combine debt | Restructure & protect |
⚠️ Important: If your credit score is low, or if you’ve already fallen behind, a consolidation loan may not be possible. In that case, debt review could be the safer, regulated alternative.
When a Consolidation Loan Doesn’t Work — And What to Do Instead
Thousands of South Africans are denied debt consolidation loans every month — especially during tough economic times. The good news is: you still have options.
If you’re:
Falling behind on payments,
Facing repossession or court threats,
Earning a stable income but can’t manage current debts,
👉 You may qualify for debt review — a legal process that restructures your debt into a manageable, court-approved payment plan.
Take the Next Step – Get a Free Debt Assessment
🎯 Don’t guess — know. Find out if a consolidation loan or debt review is right for you with a free, no-obligation debt assessment.
💬 One of our expert consultants will:
Assess your full financial picture,
Explain your options in plain English,
Help you take the next steps toward a debt-free life.
✅ Click here to book your free assessment
Frequently Asked Questions (FAQ)
Will debt consolidation fix my credit score?
No,
all negative data will remain on your profile for between 5 and 30 years from paying an up in full / settling the account.
Can anyone apply for debt consolidation or debt review?
Debt consolidation usually requires a good credit score
and a stable income to qualify for a new loan.
Which option lowers my monthly payments more?
Debt Consolidation loan or Debt Review?Debt Review
often results in significantly lower monthly repayments as well as long term benefits as the debt counsellor negotiates reduced interest rates.
Which is the safer option?
Debt Review or Debt Consolidation?Debt Review is safer
for over-indebted consumers because it is protected by the National Credit Act, includes a legal court order, and protects assets like your house or car from repossession.
Debt Consolidation offers no legal protection if you default again.
Helpful Resources
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