Debt consolidation loans
Keeping up with payments on credit cards, store accounts, and personal loans? With an Old Mutual Debt Consolidation Loan, all your debt is combined into a single loan.
- Simplify your loan repayments
- Reduce the amount of admin fees you pay on your debt
- Lower your monthly instalments*
When you apply for a consolidation loan, you'll need to list the accounts you want settled. Once your loan application is approved, Old Mutual will pay of those accounts for you and issue you with a settlement letter to confirm the payments.
When a personal loan needs to be consolidated, a full payment will usually close the paid-up account. However, you will need to close your credit cards and store accounts so that you don't accrue more debt.
Old Mutual offers loans up to R250 000 with repayment terms of 3 to 72 months. Use our free online debt calculator to help you calculate when you will be debt-free.
Besides being at least 18 years old and a South African citizen, you will need the following to apply for a debt consolidation loan:
- ID document
- 3 months' bank statements not older than 7 days
- Latest payslip
Debt consolidation essentially restructures your debt by giving it all the same loan term. Depending on the type of debt consolidated, this can mean giving your debt a longer or shorter loan term when averaged. If your consolidation loan has a longer loan term (on average) than the original debt, the consolidation loan can lower your monthly instalments. But this would also involve paying interest and fees over more months, which can ultimately result in you paying more over the life of the loan. That is why it is best to keep the term of a consolidation as short as possible while also ensuring that monthly instalments are affordable.
Whether you need to finance a dream home, consolidate your credit accounts, or pay for an unforeseen expense, there's an Old Mutual loan that can make it happen.
We answer commonly asked questions about debt consolidation loans, your credit status, and DebiCheck.
- A personal loan is a once-off lump-sum amount of money that you borrow and pay back in fixed monthly instalments with fixed interest rates.
- A revolving loan is flexible credit that gives you ongoing access to funds up to a certain limit. You can borrow money, repay it and then borrow again whenever you need it without having to apply for a new loan again.
- A debt consolidation loan is a type of loan that combines multiple debts into a single loan. This allows you to close other credit accounts and leaves you with just one account to make repayments on.
Old Mutual offers loans with terms between 3 and 72 months.
You will definitely be able to pay your loan off earlier than the agreed term. Settling your loan sooner means that you will be saving money on interest and fees.
Shopping around for credit could potentially have a negative impact on your credit score if you apply for credit at multiple places at the same time. That's why you should carefully consider if you're really interested in taking up credit and where you'd like to apply, before you start the process.
Credit life is an insurance policy that provides cover in respect of your loan in events such as death, disability or retrenchment. Credit Life Insurance is compulsory for loans with a term of 12 months and more.
You can either take this policy or provide your own policy when you apply. Not any policy will be accepted by Old Mutual Finance. It must be a policy that provides at least the same protection to you and Old Mutual Finance. Therefore, it must cover at least the outstanding balance in the case of death, or permanent disability. If you are temporarily disabled, it must cover the instalments for 12 months and if you become unemployed, it must cover the instalments for at least 12 months. It must also not have unreasonable exclusions or waiting periods.
Debt consolidation works by combining all your debt (credit cards accounts, store accounts, personal loans, and payday loans into a single loan. Usually, this debt consolidation loan will have a longer loan term, which brings monthly instalments down, making them more affordable. This a good option if you are struggling to make minimum payments and just want a little breathing room (a lower monthly instalment), but it requires you to have a credit score still good enough to qualify you for a debt consolidation loan.
If you’re seriously deep in debt and have been missing payments for some time, your credit score might already be too low to qualify for a debt consolidation loan. In this case, you could be over-indebted and debt counselling might be your only option. Taking this route would mean enlisting the help of a debt counsellor, who would assess your debt and then help you restructure it in a way that makes repayments manageable.
Learn more about the differences between debt consolidation and debt counselling.
Understanding and knowing, as well as being on top of your credit status, has many benefits. Read out credit status FAQs to learn what your credit score is, why it’s important, and more. You can also register to get your free credit score.
Want to know more about safer and more secure debit orders? Read our FAQs where we answer commonly asked questions about DebiCheck.
Customers use the online calculator at their own discretion and accept that calculations are estimates. Old Mutual Finance gives no warranty, express or implied, regarding the accuracy of such estimates and does not accept any liability for loss or damage of any kind whatsoever, which may result from the use and/or reliance of estimates provided by the calculator. All loans are subject to a full credit assessment.
Old Mutual loan offerings are made available through Old Mutual Finance (Pty) Ltd, a Licensed Financial Services and Registered Credit Provider (NCRCP35). Terms and conditions apply.
Payment options range from 3 to 72 months. Interest calculated monthly. A once-off initiation and admin fees apply. The maximum interest rate is 28% annually. Representative Example: Credit of R5 000 borrowed for 3 months. Total interest payable over loan period: R348.16. Once off initiation fee: R649.75. Monthly admin fee R69. Total Amount Payable: R6 204.91.
*Extending your loan term lowers your monthly instalments, but it also results in you paying more interest and fees over the life of your loan. Use the online debt calculator to calculate the total cost of your loan.
Some recommended reading to help you understand loans, credit and credit scores.
*Extending your loan term lowers your monthly instalments, but it also results in you paying more interest and fees over the life of your loan.