How Credit Counselling Works
Credit counselling is
a process whereby an individual struggling to keep up with debt
payments receives advice, guidance, and can participate in a debt
review program allowing for repayment of debts at a lower interest
rate and often also a reduced amount.
Credit counselling is thus not a payment holiday,
but rather a restructuring of debt payments allowing the individual
the opportunity to make one monthly payment that covers all the
creditors included in the debt review program.
The credit counselling professionals are trained,
have worked in a training, educational and or financial field before,
are qualified and able to assist the individual in setting up a
new monthly budget to ensure that the amount can be paid. The fees
for the debt counsellor are included in the monthly instalment
ensuring that the individual doesn’t have an additional monthly
expense.
Many individuals fear debt review because they are afraid that
they will not have enough money left at the end of the month to
pay their other expenses such as school fees, transport, water & electricity,
groceries, and cell phone contracts. With debt review, however,
a budget is developed that will not only ensure that you can pay
the creditors through a single monthly instalment with a lower
interest rate, but also have enough money left for the mentioned
expenses.
People often also misunderstand the fact that their names are
then listed with the various credit bureaus. A person’s name is
listed, but not as blacklisted or judgment taken. Instead the credit
bureaus and creditors are notified of the debt review status, partly
to protect creditors from extending credit and also to protect
the consumer against haunting by creditors. Once the outstanding
debt has been paid the person receives a debt clearance certificate,
allowing him or her to apply for credit again as before.
If you need help in paying debts, contact our credit
counselling division for immediate, professional service.
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