Consolidation loan eligibility depends on whether you have a reasonably good credit record and if your credit providers have not yet taken legal action against you. However, you should only consider debt consolidation, if you are in a financial position to meet your monthly instalments by making practical adjustments to your budget.
You should only apply for the exact amount that you need to settle all of your debts, freeing up your salary to cover your basic living expenses, while cutting out all luxuries and unnecessary trimmings. Moreover, you should refrain from lending from any other sources i.e. friends, colleagues or family members, and explicitly avoid all loan sharks or ‘mashonisas’ at all costs!
Once all of your debts have been consolidated, you will only have to make one payment a month in order to settle your debts within the agreed upon term. In this way, all of your small debts will be paid off and you’ll have enough money to save for emergencies – a necessity in these troubled economic times.
The danger with consolidation loan eligibility is that you may qualify for a loan amount that is a lot higher than what you need to settle all of your debts and be in control of your finances once again. It is at this point that you must exercise the most self-control, by opting to take the minimum amount you need and not giving in to the temptation of taking the higher amount you want.
Keep in mind, just because your credit provider offers this amount to you, or even encourages you to take it, at the end of the day, it is you who will have to pay the price. Listen to your better judgement and realise that you are taking out a consolidation loan to fix things, not to worsen your situation.
Taking the higher amount truthfully puts you at risk of financial ruin, as spending this money may put you into a state of over-indebtedness, in which case getting out debt will become a far more gruelling, stressful and drawn-out struggle.
You cannot put a price on the feeling of relief and freedom that comes with no longer owing debt. To think that working within a realistic budget can change the way you feel about your whole life is really eye-opening.
Your financial future is in your own hands. Make the most of your consolidation loan and make it work for you. Just imagine how you will feel on the day you can call yourself debt free.