The Benefits of Debt Settlement

Has your financial situation changed since going under debt counselling? Have you unexpectedly received a lump sum of money?

These are good things! But they come with responsibility. It could be tempting to use the cash to spoil yourself. However, there is a much more practical way to spend it if you’re under debt counselling. A way that will lead you closer to a secure financial future.

Debt settlement is what we’re referring to. It helps to move to the end of the debt counselling process faster, and comes with other benefits too. We explain more in this article.

How should you spend extra money?

Where the money goes is a tricky decision that will depend on your personal circumstances.

Saving is a great option, but if you already have money going into a savings account every month, it may not be necessary.

Putting the money towards paying off your debt is another great option.

Remember that spending the money might bring you some immediate gratification but it may not be the most beneficial option in the long run.

What is debt settlement?

Debt settlement is a solution for DebtBusters clients who wish to pay extra toward their outstanding debt with the aim of paying off their debt faster. A payment can be made in part or in full. DebtBusters will often be able to write off a large portion of the debt at a discounted amount.

We advise clients to let us know when financial circumstances have improved. Left over money in your monthly repayment will go towards other accounts so they will be paid off faster.

The benefits of debt settlement

Settling your debt can make your life easier in many different ways. It comes with undeniable benefits that you really don’t want to pass up.

1. Quicker debt repayment period

Paying extra toward your debt, lessens your amount of debt quicker. In the end, this means you’ll pay things off faster!

2. Reduced total spending through lower interest rates

Settling your debt early can lead to you paying less than you originally owed. When settling, you have a fifteen to twenty percent chance of having parts of your debt forgiven. This percentage could also be higher, depending on your personal circumstances.

In addition, when you lower your amount owed by settling, your interest rate is reduced.

3. Improved credit score

Paying back your debts faster allows you to start improving your score quicker. The credit bureaus will update your score as you make payments and the less debt you have the better your score will be.

4. Peace of mind as you become debt free or closer to being debt free

One of the best benefits that you’ll get is moving closer toward financial freedom. The relief of seeing your amount owed lower is a great feeling, and will take a huge weight off of your shoulders. This will give you peace of mind and free up mental space for you to use for other things.

The benefits of using DebtBusters to settle debt

• Get discounts and better interest rates

Did you know that you can get discounts if you settle all or part of your debt through DebtBusters?

If you settle part or all of your debt through DebtBusters, you will receive professional assistance from our debt settlement department, which will facilitate a fair debt settlement procedure, as well as negotiate with your credit providers to gain the best possible discount (the average client saves up to 25%).

• Get the best financial advice and planning

DebtBusters will also give you the best advice by helping you prioritise which debts should be settled first and you will receive a detailed breakdown of the settlements, discounts and overall savings achieved.

How else can DebtBusters help you manage money?

DebtBusters offers a variety of debt management solutions, including:

1. Debt Counselling

This is a debt management solution that allows you to get back on track. We lower your interest rates, consolidate your debt into one monthly payment, and extend payment terms to make paying easier for you.

2. Debt Consolidation

We can simplify your financial life and take away confusion by collating all your debt repayments into one. We help consumers with a consolidation offering that does not entail another loan, but is done through restructuring, one, lower and affordable instalment and an extended payment term.

3. Credit monitoring

This is a free offering that allows you to keep track of your credit report, view your credit score and track your payments as much as you like. The benefit of this is that you get a deeper understanding of your financial situation and can make better decisions to secure your future.

Settle your debt today

Using a lump sum to settle all or part of your debt will save you on monthly interest and administration fees, and therefore will free up cash flow. It will also provide you with peace of mind, knowing that you are debt free or just one step closer to becoming debt free.

If you receive a lump sum of money and wish to settle part or all of your debt, please email debtsettlement@debtbusters.co.za or call 086 999 0606 for more information.