There is no doubt that quick loans are the best financial products to use in the case of emergency. The approval is super easy and the funds are available to you within hours. However, these products are typically more expensive than the traditional personal loans available from major lenders like Absa Bank, Grindrod Bank and FNB. They have shorter terms as well. It is natural to ask yourself whether you can use debt consolidation to repay such a loan.
What is debt consolidation?
It involves the use of your home equity to repay all of your existing debt. You get a much cheaper consolidation loan which you use to close down all your other loans and credit cards. The new loan has much more affordable interest and this makes it easier to repay.
Quick loans typically do not exceed R3,000 so they are quite small even if you add interest. If this is the only debt that you have, there is little point in using a consolidation loan which is usually quite large.
If you have other unpaid loans and credit card payments due this option is highly recommended.
The question is what to do if you have outstanding payments on your fast loan. You can consider taking out another personal loan at a lower interest rate. This is not difficult if you invest time and effort in comparing products from various lenders online. The other way out is to ask for an extension of the loan but this will make it more expensive.
Do not hesitate to use expert advice if you have difficulties with repaying one or more quick loans.