Debt Consolidation Guidance

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One payment can mean different things. We help you understand the difference.

The term “debt consolidation” is commonly used for two different solutions. A consolidation loan is new credit used to settle several accounts. Consolidation through debt counselling is not a new loan; qualifying debts are dealt with through a structured repayment arrangement and payments are normally distributed to creditors through the applicable channel.

Debt consolidation guidance

Understand the two different routes

A consolidation loan and debt counselling can both result in a simpler monthly payment, but they work differently and have different requirements.

Consolidation loan

A new credit agreement with a registered lender

Requires an application to a registered credit provider and an affordability assessment.
May simplify several accounts into one new loan repayment.
May reduce or increase the total cost, depending on the rate, fees and repayment term.
Is generally difficult to obtain when a consumer is already over-indebted or has a poor credit profile.

Debt counselling

A formal single-payment solution for qualifying consumers

Does not give the consumer additional borrowed money.
Uses a formal debt-counselling process for qualifying over-indebted consumers.
Creates a proposed affordable repayment structure based on the consumer’s circumstances.
Restricts access to new credit while the debt-review status is active.

About BK Credit Solutions

BK Credit Solutions provides practical, confidential support to help individuals understand their financial situation, manage debt and work towards greater financial stability.

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GIVE US A CALL:

071 713 7064