13 May What’s the Maximum Consolidation Loan Amount You Can Take?

If you’re thinking about a consolidation loan, you may wonder how much you can comfortably take out. Rather, what’s the maximum loan banks allow to consolidate debt, and what are the assessment criteria for how many funds they award? This blog will tell you everything you need to know about how much of a consolidation loan you could be allocated, why, and what you can do to better your chances of landing better loan terms or amounts. Let’s dive in!

What’s the maximum amount you can borrow?

Firstly, remember that consolidation loans are just personal with a different name and usually, lower interest rates. Most consolidation loans will let you borrow R250 000 to R300 000 at maximum. However, this may not be true, according to your circumstances. You must meet certain criteria to take out the maximum amount.

Moreover, the criteria to calculate eligibility for a consolidation loan, according to Standard Bank, are the amount you want to borrow plus the repayment period, then the calculation of how much you would need to repay monthly. They report that their minimum loan amount is R3000, and their maximum is R300 000. You have the option to pay them back over a minimum of 12 to a maximum of 72 months. Also, their interest rate is prime plus 17.5%, as per NCA regulations.

Example

For instance, let’s say you want to borrow R300 000 over 72 months, with an interest rate of 22%. Their calculator offers 28.75% as their maximum.

What you can do to get better loan terms

Interestingly, getting better loan terms is about building a better credit score. Here are some steps you take to better your chances of favourable loan terms:

• Pay your loans on time. This makes up a huge portion of building your credit score– late payments show creditors that you’re unreliable.
• Maintain a low credit utilisation ratio. This is the amount of credit you spend to how much you have available. A rate below 30% shows you’re responsible and don’t overspend.
• Diversify your lines of credit. Try taking out store cards, unsecured and revolving credit, or an auto loan. Be sure to pay them back and comply with the above tips.

Additionally, you might also try the avalanche approach to paying off debt: that is, paying small debts at a time for gratification that will motivate you.

Lastly, if you need a consolidation loan od up to R350 000, contact Debt Refinance today. We can work out favourable terms based on your circumstances together. Take control. Get a consolidation loan.