Although both are classified as debt management tools that restructure your multiple debt accounts into a single, affordable repayment plan to reduce the stress of having to keep up to date with and on top of multiple debt repayments, there are some important differences to be aware of.
Debt consolidation: Debt consolidation is essentially another loan that covers debt up to R300 000.
You need a good credit score to be eligible to apply, you have no legal protection of your assets during the repayment period, and your debt actually increases over time because of the high interest you’re paying on the loan.
Debt review: Debt review, on the other hand, is a formal debt rehabilitation programme introduced by the National Credit Act in 2007, and regulated by the National Credit Regulator (NCR).