10 Jul The Cost vs The Benefits of Debt Counselling
The National Credit Act (NCA) introduced debt review in 2007. Since that time, debt review has been a very successful method of debt relief and has prevented thousands of South Africans from losing their assets, from being blacklisted, and from having their money drained by a huge debt burden.
Even though debt review is quite beneficial, especially over the long term, it’s crucial that you understand what to anticipate on your path to financial independence.
When it comes to debt counselling, the main goal is to streamline your finances and create space in your budget for a more comfortable lifestyle, which is accomplished by lowering the amount you spend each month paying off debt. The application cost of R50 and an extra administrative charge of R300 for each application for debt counselling that you submit are fees that must be paid in full and upfront. The administration services include a consultation, an explanation of all the procedures and expenses, and correspondence with your different creditors when we let them know you are receiving debt counselling.
Other costs involved consist of restructuring fees, reckless spending fees, aftercare fees and NCT submission fees. These fees range from as low as R450 to as high as R9,000.
Although there are quite a few fees involved when choosing debt counselling, they are relative to the amount of help you will be receiving and the benefits of getting yourself out of debt far outweigh the costs.
There are many advantages to debt counselling and listed below are a few.
One fixed monthly payment
It is simpler for you to unintentionally forget to make a payment the more account instalments that are due each month. Your credit score may be impacted by even one missed payment, and you may incur late payment charges. The procedure will be made clearer for you by a debt counsellor and there is simply one fixed reduced payment each month to be paid towards your debt.
Decreased monthly loan repayments
Debt counselling’s primary goal is to assist you in eliminating your debt permanently while still leaving you with enough money to pay for your other costs.
By extending your repayment period, your debt counsellor will lower your monthly debt payments. You may then afford to pay off your debt as well as all your other living expenditures by making smaller payments each month.
You won’t have to worry about any legal letters or phone calls from creditors once you’re under debt review. The NCA offers legal protection against creditors for both you and your assets and all communications with creditors will be handled on your behalf by your debt counsellor.
Since you are protected by the NCA, the credit bureaus cannot blacklist you while your debt is being reviewed. The credit bureaus will no longer have a permanent record of your involvement with debt review after the procedure is through.
A break from credit
Your credit profile is highlighted at the credit bureaus as soon as you are under debt review. This implies that until the debt review procedure is over, you cannot take on any debt. This is a terrific approach to avoid taking on more debt and to begin concentrating on a future free of debt.
Debt Counselling has proven successful for many consumers facing debts that exceed their income or impact their ability to make it from one month to the next. Although costly, you will not regret the debt counselling process in helping you successfully get rid of all your debts.
We at Debtco Group have the means to help you attain freedom and rescue you from debt. Our knowledgeable team of debt counsellors can help if you are having trouble handling your financial obligations. If you would like to learn more about our processes or how we can save your wallet, contact us today.