Debt Reconciliation

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remybfg10k

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I think its time i look at reconciling my debt into an overdraft or something to that effect, if i look at the interest rate difference it is worth the effort. It will also be easier to have one payment each month than all different payments!

Do Banks only offer overdrafts equal to one months salary?

What surety would i need? (The total amount i require will be about 8 months my nett salary)

What are everyones thoughts around this?
 
Dont you mean debt consolidation?
 
An overdraft will kill you on something like that. It has high interest.

A better way would be to take out a personal loan. Best is to consolidate them into a long term low interest loan like a bond.
 
Go for debt counselling at a bank. They will be able to provide you with the best solution.
 
PythonFSi said:
If youi take out a loan for that reason: debt consolidation, they wont give you a loan.
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FNB used to I did it with Standard Bank a few years ago, but with the credit act like it is at the moment I am not sure whether they still do it.
 
If the interest rate on your overdraft is lower then your other debt then do it... just make sure you cancel all your other debt though. You have to be very diciplined with your overdraft and make sure that your debt does not grow. The trick is to keep your salary in your account as long as possible as the overdraft is calculated per day.

An overdraft can be a slippery slope though... too many people just get used to being permanetly in debt.
 
The interest rate on my overdraft is WAAAAY lower than any credit card or loan I've ever had. So I use that rather than credit cards as a fall back when clients don't pay.

fun times
 
I'm in a very strong financial position luckily enough so i don't need debt counselling, but at the moment i am too busy to sit and pay my accounts etc each month, so my SO does it, but now that she has been catapulted to a senior management position she doesn't have the time to do it. Also the saving in interest is always a winner :)

So i was thinking that the easiest way is to consolidate my debt into one payment a month, which i could automate, overdraft seems to have the lowest interest rate, personal loan can be higher than a credit card right? :eek: :)
 
If it's accounts that you're trying to pay off then why not just setup stop orders for the duration of the debt as opposed to taking out further debt?
 
Credit Card and Personal loans usually are much higher than overdraft, if you have your home loan still open, consolidate into that, much lower interest rate than even an overdraft can get.

however, I'd recommend you sit down and work out exactly how much you're spending where and *why*. It won't help you consolidating your debt into one payment, saving on interest and monthly payments and then go "look, we have more money to spend, lets go and buy a new beach house" or something.

I know where every cent goes, and that allowed me to pay off all my credit cards (and close the SOB's) including 2 personal loans and my garage card.
 
I wouldn't advise debt counselling to anyone - ALL the banks ask you if you've been under debit counselling when applying for accounts. What do you think they need that information for?
 
AcidRaZor said:
Credit Card and Personal loans usually are much higher than overdraft, if you have your home loan still open, consolidate into that, much lower interest rate than even an overdraft can get.

however, I'd recommend you sit down and work out exactly how much you're spending where and *why*. It won't help you consolidating your debt into one payment, saving on interest and monthly payments and then go "look, we have more money to spend, lets go and buy a new beach house" or something.

I know where every cent goes, and that allowed me to pay off all my credit cards (and close the SOB's) including 2 personal loans and my garage card.
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I will most definitely not go any other way but overdraft (i.e. low interest), we sold our house in Valley View Estate about a year before the market dropped so luckily we were spared that expense (i couldn't find it acceptable to be paying R15,000 a month for a house) so we moved to Centurion and are now renting a very nice place in Wierda Glen Estates for much much less.

The extra money that is available will also go into the overdraft as currently we have about 33% of our salaries left over after paying for everything, it just makes more financial sense to consolidate the high interest debt into one single "low" interest payment.

But it is all about self discipline of course, money can burn a hole in your pocket :)
 
DJ... said:
If it's accounts that you're trying to pay off then why not just setup stop orders for the duration of the debt as opposed to taking out further debt?
Click to expand...

Wouldn't it be a better move to move all high interest debt into a single "low" interest debt?

The high interest accounts are not being used at all (i think they've all expired) as we are lucky enough to be able to use cash to pay for everything.

I don't believe that the word "debt" should always be seen as a bad thing though, especially with self control and some brain activity

I do have debt but i am not debt burdened, i think being smarter with money (yours or the banks) is the best way forward.
 
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