Tips to deal with a collection agency and settle credit card debt

When you're unable to pay your credit card bills on time, the card issuer may sell your account to a third party collection agency. The agency will call you or send letters asking you to clear your unpaid credit card debt. Some of the tips that can help you deal with a collection agency are:
• Ask for debt validation: When a collection agency calls you to pay your old debt on credit card, you must not make any payment before verifying if you really owe the debt to them. You should ask the agency to validate your debt.
• Know about your rights: You can protect yourself from harassing phone calls, abusive language and threats of the collectors by knowing the rights guaranteed to you under the Fair Debt Collection Practices Act.
• Find out the SOL on your state: You must find out the statute of limitation (SOL) on your state. It lays down the time limit within which creditors and collectors can file a lawsuit to make you pay for a debt. If your debt account crosses the SOL, you cannot be sued.

• Check how long you've had the debt: If you've had the debt for more than 7 years, you are no longer obligated to pay and it will be erased from your credit report as well.
• Settle your debt: If your debt account has not crossed the SOL or you wish to repay your unpaid credit card debt for any other reason, you must try to negotiate a settlement with the collection agency.
• Record conversations: You should keep records of all your conversations with the collection agency. In some of the states, you need to take the other party's permission before recording a conversation. So, if required, take prior permission.

You must also get the agreement for settling your unpaid credit card debt signed by the collection agency before sending in payments to them. However, if you are not able to negotiate a settlement with the agency, you must immediately seek help of a debt relief company. In this way, you will be able to pay off debt and also protect yourself from legal hassles.

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KP: unpaid credit card debt.
URL: http://www.debtconsolidationcare.com/credit-card.html

What are the options when it comes to borrowing money?

As the cost of living continues to skyrocket, many of us are forced to borrow money, whether it’s for a deposit on the flat you want to rent or whether you are trying to survive until pay-day, we are all a bit strapped for cash at some point. This column begs the question: what are the different options and how do you go about applying for finance?

Thanks to the wonderful world of technology, some loan companies now allow for a simple online application process which uses your ID number as a way of determining some of your credit information - checking for things like defaulted payments or, heaven forbid, judgements against your name. If all is well in terms of your credit score, the required documents are e-mailed to you, you print them out and fax them through to the lender and the process is completed once the credit provider is 100% sure that you can afford it – the myriad of lending legislation is checked by law. Typically, the money is usually available in your bank account within a couple of days, but while these sorts of loans are convenient, it is important to remember that the interest you pay on these loans can be quite costly and you will end up paying a lot more than what you originally borrow.

South Africa has one of the strictest lending policies in the world and the National Credit Act or the NCA is there to help protect consumers who get into credit agreements with lenders. There is a regulator which sets the maximum fees and credit rates lenders can charge, so before you sign a credit agreement all these rates and fees should be made available to you. If you are not happy with the rates and fees provided to you by a certain lender, shop around! There are better deals out there and you don’t have to settle for what is first offered to you.

Before you even consider borrowing money it is important that you make sure you can genuinely afford it. This doesn’t only mean knowing that you can pay back what is owed now, but would you be able to continue to make these payments if you were to have your salary cut by 10%. When drawing up your budget make sure that the estimated monthly repayment is affordable and that you still have some room to breathe in case of unforeseen eventualities- see how much you’ll be left with and ask yourself if you can sustain yourself on that amount.

This is where the NCA plays yet another vital role – registered credit providers have to run credit checks on each of their prospective clients in order to determine their monthly expense commitments – you might be default and judgement free, but if you have too many other debts to pay off, you’re unlikely to qualify for further credit.

“Affordability will vary from credit provider to credit provider and the type of loan that is being taken out. For instance, a home loan will not be granted if more than 30 or 35% of the household income. Personal loans and credit cards would be easier, but the affordability calculation is not standardised,” Luke Hirst MD of DebtBusters said.

It is imperative to be honest to your credit providers with regards your affordability and disclose all other debt obligations to them. Your credit provider will also consult credit bureaus to see if you have any other debts and how much they amount to so there is no point in lying about this information. You could be listed as a responsible borrower, a credit risk or a slow payer – all depending on how you have handled previous repayments.

“Develop a plan. Budgeting is never enjoyable, but it’s the only way to get an idea of how much money you have coming in, where your money is going to, and how much you’ll need monthly to pay off your debt by a certain date.’

“If you can continue to pay all your monthly debt repayments and have money left over, then pay the highest interest first,” Hirst said.
That means paying off credit cards before vehicle finance and vehicle finance before your house but you should never, ever skip on a payment – especially not the big ones. Bear in mind that some financial institutions are open to negotiation provided you make them aware of your situations well in advance and you arrange for a date that you do plan on making a payment. There are even some home loan options that will allow you to ‘skip a payment’ here and there over the course of a twenty year repayment.

While some forms of debt can be handy and are almost unavoidable for some, debt can be a never-ending rabbit hole and there’s no Mad Hatter and March Hare to help you out of it.

“The more credit you take out, the less disposable income you will have. If, after deducting living expenses from your net salary, you have less cash left over than the instalments on your total debt, you should apply for counselling” says Hirst.

DebtBusters are focussed on helping those who are stuck in the rabbit hole and Hirst says that they’d like to get consumers to approach them earlier in the cycle so that they can offer them more options and get them out of debt far quicker.

In some cases, leaving an application for debt review by a few months can mean a year added onto their repayment period as interest and charges build up.

If you are struggling with debt and you are looking for a way to reduce your payments into one, consulting a debt advisor is your best bet – but that’s another topic for another post…

If you’re interested in getting more information, please don’t hesitate to ask an expert!

This post was first written by Justmoney.co.za for Imod.co.za

Tips to deal with a collection agency and settle credit card debt

When you're unable to pay your credit card bills on time, the card issuer may sell your account to a third party collection agency. The agency will call you or send letters asking you to clear your unpaid credit card debt. Some of the tips that can help you deal with a collection agency are:


• Ask for debt validation: When a collection agency calls you to pay your old debt on credit card, you must not make any payment before verifying if you really owe the debt to them. You should ask the agency to validate your debt.
• Know about your rights: You can protect yourself from harassing phone calls, abusive language and threats of the collectors by knowing the rights guaranteed to you under the Fair Debt Collection Practices Act.
• Find out the SOL on your state: You must find out the statute of limitation (SOL) on your state. It lays down the time limit within which creditors and collectors can file a lawsuit to make you pay for a debt. If your debt account crosses the SOL, you cannot be sued.
• Check how long you've had the debt: If you've had the debt for more than 7 years, you are no longer obligated to pay and it will be erased from your credit report as well.
• Settle your debt: If your debt account has not crossed the SOL or you wish to repay your unpaid credit card debt for any other reason, you must try to negotiate a settlement with the collection agency.
• Record conversations: You should keep records of all your conversations with the collection agency. In some of the states, you need to take the other party's permission before recording a conversation. So, if required, take prior permission.
You must also get the agreement for settling your unpaid credit card debt signed by the collection agency before sending in payments to them. However, if you are not able to negotiate a settlement with the agency, you must immediately seek help of a debt counselling relief company. In this way, you will be able to pay off debt and also protect yourself from legal hassles.

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KP: unpaid credit card debt.
URL: http://www.debtconsolidationcare.com/credit-card.html

Facts about debt consolidation programs: What consumers must know

When you're unable to manage multiple debt payments on time, you can consider enrolling in a debt consolidation program. By enrolling in such a program, you can combine all your unsecured debts into a reduced single monthly payment and get rid of them soon.

What types of debts can you consolidate?

With the help from a debt relief company, you can consolidate all your debts that are not secured by a property or asset. Some of the types of bills you can consolidate are:
1. Medical bills
2. Credit card debts
3. Utility bills
4. personal loans
5. Charge cards

How can you benefit by enrolling in a debt consolidation program?

When you enroll in a debt consolidation program, a counselor of the relief company analyzes your financial situation and assess your total outstanding debts. A consolidation program offers various benefits. Some of these are:

• Communicates with your creditors: A representative of the company communicates with all your creditors and so they may stop harassing you with calls for payment.

• Lowers the interest rate on debts: The representative negotiates with your creditors and helps you lower the rate of interest on your bills. You can also get rid of late fees and over limit charges by enrolling in a consolidation program.

• Single payment replaces multiple payments: The debt relief company prepares a repayment plan and gets it approved by your creditors. Instead of making multiple payments each month, you have to make a single monthly payment to the company and they will disburse it to all your creditors.

How much does a consolidation program cost?

When you enroll in a debt consolidation program, the relief company will charge you an upfront fee and monthly fees. The fees are not very high and can comfortable fit into your budget. However, you must remember that there are certain fraudulent companies that may scam you to pay high fees. So, when you're enrolling in a consolidation program, you must ask the company about the fees you have to pay and also verify the company's service background and accreditations. By paying your creditors on time with the help of a reliable relief company, you can pay off debts within a few years.

More people in court due to debt

Statistics South Africa released the civil cases for debt April 2009, today the 18th of June 2009. This report looks at how many people have summonses issued against them for non payment of debt and also the number of civil judgements which means how many folk were actually found liable and then the report looks at the value of those judgements. Summonses are up by 15.6% over the last three months but have decreased by 5.5% since April 2008. Whilst judgements have increased 6.6% over the last three months and also declined by 1.6% year on year. However the value of judgements has jumped up 13.1% over the last three months and 17.4% over the whole year. The credit crunch is crunching.

• Don't hide your head in the sand
• Plan a budget
• Get debt counselling

These figures tell us that more and more people are feeling the strain, and that more and more people are being taken to court because of their debt burden. Debt is a scary thing and often the first response is to pretend that it isn't happening. However even though more people are having summonses issued against them it seems that there are more people dealing with their debt this year as evidenced by the drop in actual summonses in the three months to April. The value of civil judgements has risen to R 566 900 000! A large amount of money outstanding. The value of summonses has also grown meaning that as the crisis bites companies are calling in their debts to ease cash flow issues.

When you are faced with a debt problem the most important thing to do face up to it. Don't ignore it, debts have a nasty habit of spiralling out of control especially if they are prey to compounding interest. The National Credit Act created debt counsellors who are trained professionals empowered by law to help you get out of debt. They can freeze your debts from being collected and re-negotiate a repayment plan with the people you owe money to, while you get it sorted out. If you were lent to recklessly you may not even be fully liable for your debts, and even if you are but are feeling the pressure, get professional debt help before you need professional legal help!

Do you fear a debt judgement?

Civil summonses for debt have risen according to new data released by Statistics SA on Thursday may 21st 2009. There are more people being taken to court for unpaid debts than before. In fact the rise of civil summonses for debt rose from March 2008 to March 2009 by an enormous 40.9 percent! With 125 306 cases issued in March 2009 alone! These are scary figures, so if you feel you are close to the wire with your debt, what can you do?

• Consolidate your debt
• Compare your credit cards
• Bust your debt

Out of the 125 306 people taken to court for debt in March 2009 67 174 had judgements recorded against them. Don't let that be you! Debt consolidation works by folding your debts into your homeloan allowing you to pay off at a lower rate of interest. If you compare credit cards you can find the lowest interest rate offering or get a balance transfer card. If you are really deep in it, don't panic, there are still things that you can do.

Debt counselling was set up by the National Credit Act of 2007 and basically provides a legal mechanism for you to protect your assets if you are over-indebted. Debt counsellors can help you draw up a repayment plan and are legally able to freeze claims on your assets whilst you undergo the process. This protects what you own while you pay it off. A debt counsellor can also negotiate with the people you owe money to on your behalf. With data like this showing that debt judgements are on the rise, the most important thing to do is to not put your head in the sand and deal with your debt issues today.

Three ways to beat the debt collector

According to new data released by Statistics South Africa civil summonses for debt are rising, and rising fast. 'The total number of civil summonses issued for debt for the three months ended February 2009 increased by 15,4% compared with the three months ended February 2008'. So if you are feeling the credit crunch and it feels like you might get a debt collector knocking on your door there are a few things that you can do. The important thing is to do it sooner rather than later.

• Speak to the people you are in debt to
• Consolidate your debt
• Get a debt counsellor

These statistics were looked at by The Daily Dispatch who noted that 'during February this year, 56175 civil judgments for debt amounting to R512.6million were recorded'. That is a lot of people who owe a lot of money and would have benefited from speaking to a debt counsellor way before they got taken to court and had judgement issued against them.

The Times also looked at this story and quoted an economist who believes that this increase was to be expected and that it is 'inline with the current economic climate'. This means that many of these people who had judgements issued against them could have seen the writing on the wall and done something about it in good time. The most important thing is not to wait, the longer you wait the larger your debt will get and the harder it becomes to consolidate and sort out. A trained debt counsellor will help you bust out of this trap and help you to get yourself debt free.

Even renting gets difficult

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Even renting gets difficult

There has been some new research released by the Tenant Profile Network (TPN), which is a credit bureau, regarding rentals.

TPN do credit checks for landlords on prospective tenants.

They have a good idea of where the rental market is and how many tenants are defaulting and finding it hard to stay on top of their rental payments.

The Times looked at this research and noted stats from TPN.

Twelve percent of tenants were defaulting and unable to pay their rent, while forty six percent of tenants were only making partial payments or paying late.

This report apparently showed a massive decline from the first quarter of last year when seventy percent of tenants were paying their rent on time every time, but by the end of last year, as the financial crisis deepened, only fifty four percent of tenants were consistently paying all their rent all of the time.

This sort of problem can be seen with Carl Niehaus.

He couldn't pay his rent so he was taking loans (even if they were 'unauthorised') to pay things off.

The thing is when you take credit you pay interest on it. If this money is used to pay rent, you are getting yourself into a debt trap.

According to TPN most defaulters were in difficulty due to over extending themselves financially or renting property that costs much more than they can actually afford.

The worst defaulters were in Kwazulu Natal, at eighteen percent defaulting but only eight percent in the Western Cape.

Apparently those paying in excess of R12 000 per month in rental were the most likely to default, while those in the R3 000 - R7 000 per month bracket were the most likely to pay their rent on time and in full.

The Dispatch also picked up this story and came in with the very scary, but true headline 'More than half of all SA renters struggle to pay'.

They also had a look at the TPN report but published the five steps recommended by TPN to draw up a personal budget. Budget planning is a necessity, especially in these difficult times.

A budget can help you to know if you are living beyond your means. Don't take credit to pay off your debts unless you are intending to consolidate your debt to pay it off cheaper and easier.

Rather make sure you know exactly how much disposable income you have after deducting all of your obligations.

If you are living beyond your means it is time to cut back and take a look at those big ticket expenses, like that luxury car or designer pad.

Hey it may hurt, but you will lose much more than status if you get into a debt trap and the whole house comes tumbling down around your ears.

Just look at Carl Niehaus.

ANC gives Niehaus Debt Counselling

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ANC gives Niehaus Debt Counselling

Debt problems come to everyone. Just look at Carl Niehaus.

Doyen of struggle politics, big man in the Rhema church, fraud, liar and debtor.

These are not our words to describe Carl, but rather his own words as printed in the papers this weekend.

The Times noted his difficulties with his landlord and his admission of lying to him.

Debt can be a terrible thing that places major pressures on you.

It seems that Niehaus has been getting himself up to his ears in debt for the last few years. The problem with debt is it is not something you can just ignore, interest payments start compounding and before you know it you owe way more than you can afford.

The best thing to do is use a budget planner, and stay on top of it. When debt starts running away from you, it can lead you to do all sorts of things that would not normally be in your nature.

Lying, cheating, stealing, and covering up. No-one, except maybe politicians, really wants to get themselves into this sort of a difficulty.

People will laugh at you.

Niehaus expects this scandal to ruin his career. The actions committed by Niehaus in trying to cover his debt have threatened to draw other people and politicians into the fracas.

The Mail and Guardian looks at the effects the scandal is having on those associated with Niehaus. The Independent Democrats have gone as far as to lay fraud charges against him.

The ANC is backing their man, as reported by iAfrica, even though he is facing fraud charges. Many of Niehaus' problems have been attributed to his 'extravagant lifestyle'.

This is why budget planning is so key.

You need to have a realistic look at your income and know exactly what you can afford to just splurge out on. Or not as is more likely.

Carl did not, Carl covered up, and Carl got caught.

The ANC has offered him debt counselling.

We would suggest that debt counselling should have been offered to him years ago already when the first hints of corruption and fraud were rising from the Gauteng Economic Development Agency.

Niehaus needs a debt miracle now.

It is good to see that the National Credit Act, as instituted by Government, will now be used to help one of their own.

Debt worries are everywhere for everyone.

Don't get caught out like Oom Carl Niehaus, plan your budget and stick to it.

If you can't get some debt counselling, don't try spin your way out of it, 'cos as Carl has shown us, all you are doing is digging your self in more deep, and you will get bust and that will bust your career, all because you just kept adding to your debt, intead of sorting it.

Debt 2009 - South Africans are drowning!

Debt 2009 - South Africans are drowning!

Justmoney.co.za's first poll for 2009 asked users about their debt situation and whether or not they were coping with their current levels of debt. While it is clear that many South Africans are in debt but under control, it is alarming to see how many are drowning in their repayments...

When asked the question "Where do you stand?" with regards to debt in 2009, just 16% percent of respondents answered that they were debt free, but far more alarming was the mass of respondents who said they were drowning in debt.

33% percent of the respondents said that they were drowning in debt with another 11% admitting to have missed a payment. This, according to Justmoney.co.za's editor Andy Gilder, is not surprising given the way users have interacted on the site in recent times.

"The results of the poll come as little surprise to me - we have noticed an overwhelming number of applications to our debt solutions across the site. To be honest, there have also been a massive number of applications for personal loans - a great number of which are requesting the money to pay off existing debts. South Africans are struggling."

Justmoney.co.za offers clients debt counselling -a process which consumers can use to rework their finances and extend their credit terms through NCA accredited counsellors, as well as debt consolidation, also known as remortgaging, which allows homeowners to take out a further loan on their current home loans, pay off more expensive debts in one go and then pay off a single loan at a far lower interest rate.

According to Gilder, both of these have seen a sharp increase in activity in the first month of 2009. "Debt counselling has proven popular with users who have missed a repayment because many of them are on the edge of becoming dangerously behind and debt counselling can often save them from full on administration."

"While it is not always ideal to carry short term debt into the long term, debt consolidation proves popular when users have a number of smaller loans or repayments at high interest rates. Debt consolidation allows you to make one monthly payment at a lower interest rate and as a result it becomes easier to manage for most consumers. "

Results for the January poll were as follows:

When asked "Debt 2009 - where do you stand?"

16% said Debt Free

40% said "In debt, but under control."

11% said "I've missed a repayment."

33% said "Drowning!"

To see how Justmoney.co.za can help you in your debt woes, click here

Banks owed Billions...by all of us!

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Banks owed Billions...by all of us!

The National Credit Regulator has responded to new data that shows how much is owed by consumers in South Africa to lenders.

The financial news outlets had a look at this story.

IOL came with the headline that 'Consumers 'in the red' owe banks billions'.

The exact figure that they give is R14 billion.

That is one huge wack of wonga and could start a revolution or five in a small country.

The scary bit is that this is only the tip of the iceberg, waiting, submerged, while the band plays on, is the majority of debt.

That R14 Billion is only what the 41 000 South Africans who are currently under debt review owe.

That is just a small part of the total debt market. Debt review was a process legislated by the government in order to help consumers who have too much debt. You can read our handy guide to the National Credit Act or you can get more information on debt review.

The thing is debt review is designed to help you hang onto your assets if you are feeling the pinch, especially now with the global credit crunch kicking in.

41 000 may sound like a lot but it is really not.

Many people who feel the debt pressure tend to do nothing about it, and that's when your debt can turn into bad debt. The scale of the rising problem can be seen in that there is now 41 000 people under review and this is up from 13 000 last year.

The R14 billion makes up a small portion of the total bond (mortgage) debt in SA of around R800 billion.

The article further states that 'nearly seven million South Africans have fallen into arrears on their debt, or have some form of a negative credit history'.

Business Report carried an article as well. They noted however that the effect of the recent high (and now dropping) interest rates had cooled consumers desire to take on more debt.

This is a good thing, and it is better to get your debt sorted first before you need debt review or have a judgement made against your credit record.

The Mail and Guardian noted that credit growth was slowing which will give the Reserve bank room to cut rates.

The Monetary Policy Committee meets this week, and The Guv, Tito Mboweni is expected to deliver us a rate cut.

However they said that 'The rate of growth in credit extension was expected to have increased at 15, 4% year-on-year, according to I-Net Bridge's Econometer'.

This is still faster than inflation and means we are spending beyond our means. Justmoney reckons you should contact a debt counsellor at the first sign of debt problems, and get yourself sorted to weather the credit crunch.

Monday 19th January - the worst day of the year

Monday 19th January - the worst day of the year

If you were feeling a little more depressed than usual on Monday and not sure why, a British psychologist has the answer for you.

Quite simply, Monday the 19th of January is officially the most depressing day of the year.

Dr Cliff Arnall, a former Cardiff University professor, has drawn up a mathematical equation to prove that yesterday, the last Monday before payday in January, is the most depressing day of the year.

Proving depression using a mathematical equation may seem somewhat farfetched, but Andy Gilder - editor of online personal finance experts www.justmoney.co.za - says that there are a number of factors that contribute to Monday being as depressing as everybody might have thought.

"While Dr. Arnall's theory takes into account factors like body image, the cold Northern hemisphere weather and the likelihood of the first broken New Year's resolution, there are a number of very tangible factors that made Monday such a tough day for South Africans."

" Apart from the Monday and post holiday "blues", it has been a very long time since we all received our last pay cheque as most companies pay Christmas salaries earlier in December. That means we all have to stretch our monthly income just that little bit further in January."

"In addition to that, with the end of the month coming up we all know that the credit card bills from the Festive Season are just around the corner and if like many South Africans you have over indulged over Christmas, you could be in a state of genuine ‘New Year Depression', with the prospect of starting a new year in debt a genuine concern."

Starting the year on the back foot puts a lot of people into the doldrums, but we needn't stay depressed for too long, Gilder insists. Instead, why not make one more New Year Resolution?

One that affects your financial mood...

Gilder says "The New Year often brings with it things like policy renewals for insurance cover and medical aid. So, instead of signing away for another year of the same, why not be proactive in seeing whether you could be saving yourself money by moving providers or negotiating a better deal with your current one. Even if you save yourself a small amount, it will be rewarding to know that you aren't paying a cent more than you should. That, as far as the News Years Financial Blues goes, could be enough to beat them down."

"Sadly, if you've already tossed away the nicotine patch there isn't anything we can do for you, and if you have already stopped hitting the treadmill as often as you had promised yourself you would, we aren't the people to call. But, if you are looking to save some money in 2009 and want a resolution that is achievable and easy to follow out, log on to www.justmoney.co.za and compare a range of financial products and save yourself some money."

2009- Debt Free Resolution

2009- Debt Free Resolution

Forget every other New Year’s Resolution you’ve been thinking of making – make 2009 the year you get out of debt! Here are some Justmoney tips on how to do it:

Make tackling credit card, personal loan and store card debts your number one priority this year - these are the debts that are most likely costing you the highest interest. While you might not be debt free by 2010, following a few of our tips could see you well on your way to living a debt free life sooner rather than later.

1. Write up a budget

This might be a cliché, but you’ll need to do the basics first to give yourself the best chance of reaching your goal of becoming debt free. From here, you can figure out how much cash you have available at the end of each month to tackle your debts – don’t get any ideas about spoiling yourself – becoming debt free is the priority.

Remember, you should only repay an amount that’s affordable- don’t overstretch yourself.

Check out our Budget Planner Here

2. Clear up your Credit Cards

One easy way to radically reduce the interest you pay on your debts -- and therefore pay them off more quickly -- is to move all of your credit cards onto a balance transfer deal with another credit card provider. You will pay a far smaller interest rate on certain balance transfer deals, which will give you plenty of time to attack your balance.

Justmoney recommends the current American Express Balance Transfer Card that offers 9.9% interest for the first six months (thereafter the regular 23.9%). Remember that the lower interest rate will only apply to the debt you transfer, so any new spending you do will be charged at the regular 23.9%.

If you are really committed to ending your debt woes, you’ll transfer to the new card, cut up all the old ones... and then cut up the new one as well!

You’ll owe the same amount as before, but at a lower interest rate.

To take a look at all the credit cards options, click here

3. Overpay on your personal loans

Repaying your debts as quickly as you can is the best way to reduce your interest bill. If you have a flexible loan your lender should allow you to make overpayments, which will reduce the term. Some loans can be fully repaid early without incurring any nasty early cancellation fees, but do see if this applies to your loan. 

To learn more about personal loans, visit our personal loan guide here

4. Consolidate expensive short term debt into your home loan

It is only possible to consolidate your debt if you have a home loan with ‘equity’ in it (the difference between your property value and mortgage). Debt Consolidation can save you a huge amount in interest repayments as your home loan will be your cheapest form of debt. It also means that you will have just one monthly payment. However, be sure you overpay into your home loan every month to avoid paying more interest in the long term.

To learn more about debt consolidation, click here to read our guide, or apply here.

5. The Key - the snowballing effect...

If you can’t get all your debts onto low interest deals, here’s what to do:

Tackle what you owe more effectively by clearing your most expensive debts first, while making sure you keep paying the minimum repayments on your cheaper borrowings.

So, for instance, say you have a personal loan that charges in excess of 30% and a credit card that only charges 23%. Pay off as much as you can afford on the personal loan, but only the minimum amount required on the credit card.

Once the loan has been cleared, use all the freed-up cash to tackle the credit card. Any interest-free debts can be repaid last. This is known as snowballing as your repayments can be rolled up onto the next debt as each one is paid off.

Best of Luck in Clearing your debt – and remember that Justmoney.co.za is just a click away...

If your debts are overwhelming you, seek professional advice...

If, after looking at all the alternatives above you still can’t see light at the end of the tunnel and your debts are a constant worry, you can seek help and advice from independent debt advisory and Debt Counsellors like Debtbusters or start by reading ourdebt management guide...