A personal line of credit functions much like a credit card, usually a bank and a customer that establishes a maximum loan balance that the lender permits the borrower to access or maintain. With a credit line, the borrower can access funds from the line of credit at any time, as long as the consumer does not exceed the maximum amount set in the agreement and as long as he meets any other requirements set by the financial institution, such as making timely minimum payments.
With a line of credit you are more likely to be overcharged on interest (just like a credit card) and how much the bank adds on to your rate depends on a number of factors, including your credit score.
A consolidation loan means taking out a new loan to pay off a number of liabilities and consumer debts, generally unsecured ones. Therefore, multiple debts are combined into a single, larger piece of debt, usually with more favorable payoff terms: a lower interest rate, lower monthly payment or both. Consumers can use debt consolidation as a tool to deal with student loan debt, credit card debt and other types of debt.
While a line of credit allows you to access money whenever you need; a consolidation loan assists you in that you pay off all the credit you owe and you are left with one debt to pay with a lower interest.
We will be able to offer advice on the suitability of debt consolidation to your specific financial situation, as there are instances where it would prove unsuitable. Our consultants will be able to help you with regards to secured and unsecured debt consolidation, and advice as to which would be most favorable to your outstanding debts. Operating on a national basis, we can also provide you with debt counseling or a debt review in South Africa. As mentioned, debt consolidation could save you on monthly payments and interest rates, which has made it a viable option for many. To find out if debt consolidation in South Africa is an option for you, contact Quick Consolidation Loans today.